We must end the standing charge on energy bills to protect the poor

An elderly person in a one-bed flat should not be paying the same energy poll tax as a billionaire in a palace, writes Donnachadh McCarthy

‘Let’s scrap the poll tax on bills and reverse the recent punitive cut in Universal Credit cut to cover rising energy prices’ (Getty Images)

If we properly defend poorer households, the energy crisis could be a green blessing in disguise for Britain and in the medium-term reduce bills for everybody, help decarbonise our home energy consumption and create hundreds of thousands of good UK jobs.

The sane response to the energy price crisis is to radically improve home energy efficiency and switch our remaining fossil fuel consumption for heating and electricity to renewables as fast as possible at the lowest possible cost. The key short-term challenge, however, is how to protect millions of poorer families from sinking into fuel poverty next winter.

For once, Boris Johnson is right. Cutting VAT for all household bills, as the Labour Party suggests, would waste millions in taxpayers’ money, providing a subsidy to middle and upper-class families for fossil fuel consumption in the home. This would fly in the face of global efforts to abolish the $6 trillion (£4.4 trillion) that the fossil fuel industry receives in subsidies each year from governments. The far better way to protect poorer households is to reverse the recent punitive cut in Universal Credit. This would give approximately £1,000 back to them annually, which would cover the predicted energy price rises by 2023.

A measure that avoids costs to the taxpayer would be to end the £200 standing charge on bills. It is absolutely unfair that an elderly person in a one-room flat pays the same energy poll tax as a billionaire in a palace. Abolishing the standing charges and applying the connection costs to the unit of energy would mean that those with huge homes with swimming pools and saunas would pay more, according to usage.

Proposals from the small group of right-wing Tory MPs who formed the Net Zero Scrutiny Group (NZSG) to fight the government’s investments in climate protection, to cut the insulation, renewable energy and social levies on bills and to restart fracking in the UK, are even more misguided.

They claim sympathy with poorer households, but they voted through the punitive cuts to Universal Credit. They are also part of a government whose actions over the past 12 years have left Britain at the mercy of this wild 400 per cent upsurge in fossil fuel gas prices.

Those actions included the closure of the UK’s national fossil gas reserve and the deregulation of the energy market, which left us at the mercy of the sudden short-term rises in prices.

They slashed home insulation installations by 95 per cent between 2012 and 2019, which left millions of families, with expensive to heat cold homes, needlessly facing fuel poverty.

And while we have switched about 43 per cent of our electricity generation to renewables, which is protecting electricity prices from soaring at the same rate of gas, the fact that they failed to phase out more fossil-fuelled gas power stations means that prices of electricity will still rise significantly.

The Tories over the past decade destroyed almost all of the onshore wind installation industry, despite it being the cheapest form of renewable electricity and likewise devastated swathes of the solar electricity industry, by a brutal tapering of feed-in-tariffs. So, the proposals by the NZSG to slash the renewables and insulation levies on our utility bills would actually make poorer families even more vulnerable to soaring gas prices moving forward.

And their proposed resumption in UK fossil-fuel gas fracking demonstrates their contempt for Britain – the practice was discontinued as it was generating repeated earthquakes where it was being trialled. Furthermore, they know gas prices are set by global markets, not by UK production, and so fracking would have a negligible impact on UK gas prices.

The Labour Party’s proposal for a windfall tax on UK fossil-fuel corporations, who have reported that the energy crisis has resulted in a cash-machine bonanza makes sense. It has a precedent with the Conservative chancellor George Osborne during a previous price surge in 2012. The current Tory claim that it would discourage investment in expanded fossil fuel exploration in the North Sea is nonsense in a climate crisis, especially when the IEA says we cannot invest in any new fossil fuels if we are to hit net zero by 2050.

But we also need to honestly acknowledge that the depth of the climate emergency means that we have to challenge the notion that the middle and upper classes have a divine right to heat all rooms in our homes, day and night, at 24C, while dressed in Mediterranean summer clothes or underwear. Responsible families would only heat the room that they are in to the recommended 18C maximum (21C for the non-ambient elderly) and dress in warm winter layers (and yes you were right E.ON, including warm thick socks).

If we avoid the suggested populist fossil fuel subsidies to the middle and upper classes, advocated by Labour and the Greens, and the green levy cuts advocated by the NZSG, the rising energy prices might force more well off households to finally invest in proper insulation and solar panels for their homes. Soaring energy costs will make such investments more attractive, with pay-back periods slashed by more than 50 per cent. So let us hope reason prevails and our politicians and media grab the positive silver-lining in this crisis and help create a better, cheaper and carbon-free future for all of us.