The impossible choice of ‘heating or eating’ shames Britain

The image of the UK as a country where people can’t afford to heat their homes is not one any of us should be comfortable with, writes James Moore

With Britain now staring down the barrel of winter following months of elevated food price inflation and today’s energy price cap increase, Houston: we have a problem.

Around the country millions have woken up to energy bills that are up 2% as regulator Ofgem's latest price cap came into effect. Last week, Ofgem announced that bill-payers will soon be offered plans with lower standing charges, but this is a bit like trying to put out a raging fire in your front room with the glass of water you keep beside your bed.

Standing charges have long been controversial because they are fixed and so limit how much you can save through frugality alone. Even if you throw out the TV, light one room, and turn the heating on only when the ice is two inches thick on the local pond, you can still get clobbered by high standing charges.

The trouble is, experts say that the new lower standing charge tariffs won’t save you much money because unit charges will rise at the same time, and, as ever, with energy bills, you will probably need a maths degree to work out if it is actually worth switching.

There is some genuine relief to come in January, when the cap is expected to fall. But that won’t come as much comfort to those faced with the heat or eat dilemma because any benefit from the latter is liable to be wiped out by the continued increase in food prices.

As I’ve written before, food price inflation is cumulative. The annual rate of 5.1 per cent in August comes on top of previous increases that are already baked into food prices. Shoppers’ bills have been placed into a hot oven and left to burn.

‘Things get really sticky when you chuck in the issue of fuel debt, built up as a result of prolonged periods when households struggle to pay bills’ (PA Archive)

Fuel charity National Energy Action (NEA), meanwhile, estimates that there are 6 million families in fuel poverty; that is, families who need to spend 10 per cent or more of their income on energy in order to keep the house warm and so face the “heat or eat” dilemma.

The government’s definition of fuel poverty is more complex and slippery. It doesn’t help that different parts of the UK use different measures. Why might that be? If you guessed politics, give yourself a gold star. For what it’s worth, I think the NEA’s definition is a good one, so we’ll go with that.

Things get really sticky when you chuck in the issue of fuel debt, built up as a result of prolonged periods when households struggle to pay bills.

The root cause of all this is an issue that I’ve been writing about a lot lately because it actually affects multiple areas that have become extremely challenging of late. Think housing, health, long-term care, and so on. The pigeons are coming to roost as a result of long-term policy failure. The boring nitty-gritty stuff politicians don’t pay enough attention to because it doesn’t get them social media clicks or affect the polls. Until it does.

In the case of Britain’s energy policy, or the lack of anything resembling one for too many years, it has left the nation overly reliant upon imported gas and thus wholesale energy prices. These are apt to swing wildly, and while they have come down since the energy price crisis that emerged shortly after the end of the pandemic, they remain high by historic standards. Recent efforts to address the problem, by commissioning new nuclear power plants, for example, will actually add to bills because the latter have got very expensive indeed.

The image of the UK as a country where people can’t afford to heat their homes in the dead of winter, leaving adults and children shivering in the dark, is not one any of us should be comfortable with. But I’m afraid that is where we are. In the absence of government action to alleviate the situation, what can be done?

Donating to your local food bank might help with the “eat” part of that impossible dilemma. But it's a short-term fix, and we have too many people in hideous situations. How this is not viewed as a stain on the conscience of the nation is beyond me.

The solution favoured by campaigners is that of “social tariffs,” offering lower bills to those in need. This would inevitably lead to a debate about who pays – energy companies, government, bill payers, or a combination of the three? – and how it would work.

Okay, fine, let’s accept the principle, then we can have that argument. See how easy that was?