Liz Truss’s energy price freeze will not be enough to save as many as 2.2 million families from being forced into fuel poverty this winter, charities have warned.
A £2,500 limit on average domestic energy bills for the next two years will still leave costs almost double last winter’s level, delivering a “knockout blow” to many households, said the anti-poverty Joseph Rowntree Foundation (JRF).
There were calls for more targeted help for the most vulnerable, including those on very low incomes, the elderly and disabled people who need 24-hour power for medical equipment.
Citizens Advice called for action to ensure that energy companies do not chase customers for debts or force people onto prepayment meters if they struggle to pay bills on time this winter.
The charity’s chief executive Dame Clare Moriarty said Ms Truss’s announcement would be “a huge relief to millions”.
But she added: “Energy bills are still sky high. A freeze may not be enough to reverse the devastating trend in people coming to us because they’ve run out of food or can’t top up their gas and electric.
“The government needs to stand ready to provide more support for people on the very sharp end of this crisis.”
National Energy Action said that Ms Truss’s package will deliver lower bills to 24 million households and save 2 million from being plunged into fuel poverty. But chief executive Adam Scorer said that numbers in fuel poverty were nonetheless expected to increase from 4.5 million to 6.7 million households, rather than the 8.9 million forecast if no support had been offered.
“Even with this price freeze the average bill has doubled in a year,” said Mr Scorer.
“The new government must not forget that the most vulnerable need targeted support.
“Those who use more energy in their homes because of medical conditions, those who are elderly and those on very low incomes need extra help so they don’t have to ration their usage, putting their physical and mental health at risk. Those on prepayment meters must not be forgotten either. They would benefit from a lower rate or additional relief from huge standing charges.”
The JRF’s chief economist Rebecca McDonald said that chancellor Kwasi Kwarteng should announce further targeted support for the most vulnerable in his emergency Budget later this month, to provide reassurance that help will be offered after Rishi Sunak’s scheme of direct payments ends in April.
“Struggling households now have some meaningful reassurance but they remain in the dark about their security beyond April,” said Ms McDonald. “People are already unable to pay a range of bills so, even after today’s announcement, the failure to offer further targeted support will feel like a knockout blow to the millions of people agonising about their finances.”
Justina Miltienyte of energy price website Uswitch.com, said that even after the price freeze and £400 direct payment, households could still be paying an average £237 more for energy over the three coldest months this year than they did last year.
“Amid the solace, it’s important to remember that we are not out of the woods yet,” she said. “Even if rates are not as high as they were going to be, households will still be facing an extremely difficult winter.”
New research commissioned by the Money Advice Trust has found that one in nine UK adults (11 per cent) said that their monthly payments had already been raised to a level they could not afford – even before the rises which had been expected in October.
A significant proportion of callers to the charity’s National Debtline service – 45 per cent, up from 37 per cent in 2021 – do not have enough money coming in to cover essential costs.
Trust chief executive Joanna Elson said: “Although bills won’t now rise to as extreme levels, they remain high and are still difficult to afford for many, particularly people on low incomes.
“The next steps should include uprating benefits so that they keep pace with inflation and for Ofgem and energy suppliers to increase protections for people who do fall behind this winter.”
And James Taylor of disability equality charity Scope said: “Freezing the price cap at twice the average cost of a year ago is a sticking plaster on the financial pain disabled people are experiencing.
“Nearly a quarter of disabled people say that their income is not enough to cover their bills. Right now, disabled people are anxious that they still won’t be able to power life-saving equipment this winter. Personal hygiene and dignity are turning into luxuries many disabled people won’t be able to afford.”
Unions said it was “remarkable” that Ms Truss was turning to taxpayers to fund the freeze, rather than putting a windfall tax on energy company excess profits.
TUC general secretary Frances O’Grady said: “The prime minister is making the wrong people pay. She should have imposed a much larger windfall tax on profiteering oil and gas giants. And she should have required all firms getting help with energy bills to commit to no lay-offs for the lifetime of the help, to protect livelihoods.
“And it’s not just energy bills soaring – so she needs to do more to help families get through the winter. That means a real plan to get wages rising, a big boost to universal credit, child benefit and pensions, and a massive rollout of home improvements to cut bills. And it’s time to bring energy retail into public ownership to make sure this crisis never happens again.”
Unite general secretary Sharon Graham said: “It is quite frankly remarkable that the prime minister is asking workers to pay for massive energy company profits. The economy is broken and workers will see through this plan to boost profiteering yet again.”
