Tuesday 6 September 2022

Fuel Poverty Action asks the new Prime Minister 3 challenging questions

Fuel Poverty Action has today written an open letter [1] to incoming Prime Minister Liz Truss, posing three questions about her response to the energy crisis that threatens to plunge millions of people into fuel poverty, causing cold, hunger, and destitution on a scale unseen for generations.  .

The first question is: Who will benefit from the policies to be announced this week, widely expected to include a taxpayer bail-out in the form of holding prices down.  We point out that the savings from such a move will largely accrue to people who can afford to use a lot of energy, while people who are barely putting the heating on will save very little.  Nor does the public have faith that we will benefit from a government loan based on a fantasy of a crisis-free future.  

The second question is: Who will pay? Will it be the taxpayer, at the expense of expenditure on welfare benefits, health, and housing?  Or will it be the energy companies, now enjoying undreamed of excess profits?  Will the Prime Minister’s energy policy address the fact that many of the suppliers claiming that they can’t sell energy for less than the wholesale prices they pay, are an arm of the very companies choosing to charge these prices? The letter says, “Asking taxpayers to pick up the tab for the obscene prices they are charging is the latest idea [2] from an extortionate industry that puts its profits before people's lives, and is ready to sacrifice even the planet we live on.” 

The third is: Will she implement FPA’s flagship proposal of Energy For All – a free allocation of energy to cover each household’s needs for essentials like heating, lighting and cooking. Energy For All would be paid for by

  • higher tariffs on higher use - beyond needs
  • windfall taxes, which could almost cover the support package the new Prime Minister is expected to announce [3], and
  • an end to fossil fuel subsidies from the public purse, which amount to millions of pounds every day, and further swell the coffers of wealthy individuals and extraction of a polluting, expensive fuel.

This would have the benefit of encouraging responsible energy consumption, encouraging the introduction of energy saving measures and promoting green energy investment. Unlike most of the proposals being put forward it would be at the same time universal and targeted, turning rightside-up the current upside-down energy pricing system, where you pay more per unit of energy when you use less of it. 

The concept of Energy For All has captured the public's enthusiasm and brought new hope.. More and more organisations including the TUC are now coming out with similar schemes, and a petition signed by over 550,000 people will be handed into Downing Street at 1.00 pm on September 19th, with supporters  gathering beforehand at an event including speakers. 


[1] https://www.fuelpovertyaction.org.uk/news/fpa-writes-to-the-new-prime-minister-about-her-energy-policy-and-the-cost-of-living-disaster/

[2] Energy UK has proposed that taxpayers foot the bill for struggling businesses to meet their surging bills in a plan that could cost anywhere between £50bn and £100bn. https://inews.co.uk/news/politics/energy-companies-plan-businesses-winter-pay-bills-leaked-letter-1827585

[3] https://www.taxjustice.uk/blog/44bn-a-year-could-be-raised-from-higher-tax-on-oil-and-gas-profits

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