CIEH expresses dismay at UK government U-turn on price-cap freeze

17 October 2022, Ciaran Donaghy

Following reports that the UK government are set to U-turn on their commitment to freeze the price cap on energy for two years, the Chartered Institute of Environmental Health (CIEH) has expressed its dismay at the decision and has urged the Government to retain this commitment to prevent millions of households falling into fuel poverty.

Less than six weeks after committing to freeze the price cap on energy for two years, the new Chancellor Jeremy Hunt, stated that the proposed price-cap freeze would now end in April after which time, more targeted support would be given. In a televised address, Mr Hunt said, alongside rowing back on planned cuts to corporation tax, the Conservative party has now decided to make further changes to the mini budget ahead of the medium-term fiscal plan which had been scheduled for two weeks’ time.

Liz Truss’ plan to freeze the price cap on energy came amidst worrying forecasts that the most recent price cap was due to increase to £3,549 before being projected to increase to as high as £4,650. This represents staggering price cap volatility since October 2021 when the price cap stood at £1,277.

Increases to energy bills are already responsible for an estimated 2.5 million households with children estimated to be in fuel poverty from 1 April 2022. Underlying market conditions responsible for the current cost of energy crisis have not stabilised. Therefore, there is no reason to believe that the price cap will not skyrocket to such levels after the freeze on the price cap has been lifted, with millions of households left to face unaffordable energy bills.

While the Government has already announced financial support for household bills providing £400 payments to households over the winter months, the price cap freeze was essential in preventing further hardship for many households. Not only are CIEH urging the Government to reinstate the two-year price cap, but we call on the Government to do much more, both in terms of increasing the amount of financial support provided to households as well as introducing a raft of energy efficiency measures to lower bills and to support households through this spiralling cost of living crisis.

Recent research from Friends of the Earth and New Economics Foundation into energy crisis hotspots shows how an emergency energy efficiency scheme for England and Wales could be delivered by local authorities over the coming months, starting with the neighbourhoods most in need, to protect people from soaring bills before this winter and beyond.

Ross Matthewman, Head of Policy and Public Affairs of the Chartered Institute of Environmental Health said:

“This is yet another unprecedented U-turn from a UK Government in disarray.

The decision to end the price cap freeze after six months rather than the proposed two years will have a devastating effect on households struggling with their energy bills. While insufficient, the two-year energy price cap freeze provided some reprieve to households, who now face grave uncertainty on what support on household energy bills exist beyond April.

We urgently call on the UK government to get a grip, reinstate the two-year energy price cap freeze as well as intervene more broadly to support households struggling with their energy bills.

While we welcomed the government’s Energy Bills Support Scheme, it is apparent that £400 spread over six months is simply not going to be enough to tackle the spiralling cost of energy crisis, with more significant intervention needed.

Not only are we are calling on the government to double the amount of financial support provided to households to protect households this winter, but we are also urging them to introduce a raft of energy efficiency measures. Such measures can act both as a means of supporting households most in need right now as well as shielding households from spiralling energy bills in the long-term.”

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