51: Crisis averted? Government response to fuel poverty and soaring bills
With the energy crisis showing no signs of slowing, and UK government policy changing and changing again seemingly by the hour, we return to the pressing issue of fuel poverty. Joining Matt and Fraser are Jessica Cook from National Energy Action (NEA) and Aimee Ambrose, Professor of Energy Policy at Sheffield Hallam University.
Essential Reading:
‘Fully Charged’: https://www.youtube.com/watch?v=XZZisnQi7Ww
https://www.ft.com/content/c40c33e2-0684-40de-a0af-1ec2e77e1abd
Episode Transcript:
Matt: Hello and welcome, listeners. Before we get stuck into today’s episode, just to flag up that when we recorded this episode, we weren’t aware that the government had just announced, after we’d recorded, that they were hoping to roll out a national energy awareness campaign to reduce energy consumption and cut bills. We still don’t know the details of this and we await to hear them but as you listen to this, you’ll be more than aware that we didn’t know the information. Anyway, enjoy and look forward to hearing from you and we’ll get stuck in. Thanks.
Fraser: Welcome to Local Zero. Thanks for being with us. With you this time is myself, Fraser Stewart...
Matt: And me, Matt Hannon. Sadly, no Becky today as she’s full of the dreaded lurgy and can barely speak. We wish her well and I hope she feels better soon.
Fraser: Yes, get well soon, Becky. So we talk a lot about fuel poverty and about just transitions in this podcast and we make absolutely no apology for that. It’s the big and important topic. It affects a lot of people. It affects all of us and not enough is being done about it.
Matt: So today’s episode is all about fuel poverty in this current and deepening energy crisis and, of course, the transition to net zero, what needs to happen and how we can kick-start this action after years of inertia.
Fraser: We’ll be hearing shortly from Aimee Ambrose. Aimee is Professor of Energy Policy at Sheffield Hallam University. Also joining us will be Jessica Cook from National Energy Action.
[Music flourish]
Matt: So if you haven’t already, go find and follow us @LocalZeroPod on Twitter to get involved with discussions over there. Also please feel free to email us at LocalZeroPod@gmail.com. We’d love to hear from you.
[Music flourish]
So, Fraser, before we began, we had a few technical difficulties and I think in the context of this episode on energy efficiency, energy bills and fuel poverty, we were struggling to get your Wifi on and it turns out that we had a nice, simple fix.
Fraser: Yeah, the simple fix. So for context, I work in what is a home office and definitely not a shed in my back garden.
Matt: Shoffice.
Fraser: It’s a shoffice, yeah...
Matt: It’s a shoffice.
Fraser: ...but the Wifi is connected to the house as the router is in the house and the only way that we can get stable Wifi is if we open the backdoor which is just...
Matt: Nice and efficient [laughter].
Fraser: ...excellent news for efficiency and excellent news for the planet [laughter].
Matt: So we’re already doing all the wrong things [laughter] before we talk about this.
Fraser: My wife has four dressing gowns on but we’ve got a stable connection for the duration of this episode.
Matt: To live with a podcaster [laughter] but we are doing some things right. We’ve actually had a couple of nice reviews on Apple Podcasts which is wonderful. Thanks for keeping these coming in. It keeps us right, keeps us on track and hopefully, doing the things that you enjoy. So one from ViolaTom which might be two people called Viola and Tom – we weren’t quite sure – or Tom who plays the viola. Either way, it was a wide-ranging discussion with people at the heart of local and national systems; a must-listen for people wanting to join the dots between local energy, net zero and just transitions. Top stuff!
Fraser: Yeah, thanks very much. A bit much and a bit gushy but, yeah, not bad. We’ll take it.
Matt: We also had some other good news. Yesterday, we were at The Strathclyde Medals which is an award ceremony the university runs and thanks to one of our regular listeners, Roddy Yarr, who is Head of Sustainability at Strathclyde University. He nominated us for an award which we got. Unfortunately, I was the only one to collect it because, Fraser, you’re too busy fixing the world [laughter] and Becky was too poorly but thank you, Roddy. We really appreciate the nomination and it’s really great to have that recognition.
Fraser: It must have been devastating to have to take all that credit yourself, Matt. That must have been really difficult.
Matt: It was [laughter]. I was the only individual collecting a team award as well, so people were looking behind me and thinking about Russian dolls and that there would be other podcast hosts behind me but sadly, there was not [laughter]. Also, thanks to our listeners for supporting us and keeping us right. What’s been great over the last couple of weeks is we’ve been having loads of podcast episode suggestions. Now, Fraser, some of these may not jump off the page to you but the first one... have you heard about bike buses?
Fraser: I have embarrassingly not heard about bike buses, Matt. Explain them.
Matt: Well, a bike bus – I’m no expert but a bike bus, as I understand it, is a collection of bicycles that do the same as a school bus and basically, brings a load of kids together (obviously, chaperoned by adults on our dangerous and non-cycle-friendly streets). Basically, they get the kids to school on the bike. Other suggestions were community-led retrofit.
Fraser: Hear! Hear!
Matt: So how communities could do it rather than maybe waiting for a big corporate to help you out and another one, I think we’ve got scheduled for the New Year, is council climate action scorecards. How do we rate the performance of our councils? That’s a really exciting one to come.
Fraser: Yeah, we’ve skirted around the topic and talked quite a lot about the potential role of councils or local authorities. We had one local authority episode way, way back when I think that’s worth going back and checking out but it would be good now, as we kind of ramp up and accelerate the net zero transition, to have a focus on things like retrofit that are more likely to happen at the local level. I think it’s more important and interesting than ever.
Matt: I think individually, you and I, have been busy on this front. You mentioned just earlier that you might be having some solar being installed in the not-too-distant future. Tell us more.
Fraser: Yeah, we moved house back to the neck of the woods that we come from, my wife and I, and we’d always planned to get solar if we could afford to do it. We found a local installer via tradespeople and workies that we know in the area and we’re having our solar installed in the next couple of weeks. We’ve got 11 panels going up. We’ve got a 5.1 or 5.3 or something battery being installed alongside it.
Matt: Oh, mama! That’s big.
Fraser: It is. It’s an array that will do us more than enough and if we think about and/or can afford an EV or a hybrid down the line, it will cover us there. That should more than cover us and turn the array profitable by year five or six.
Matt: You’re getting them installed just in time for the winter solstice as well which is good.
Fraser: Yeah [laughter]. We’ve put a lot of thought into it. We wanted to make sure that we fully maximised it [laughter].
Matt: Get them in just in time [laughter]. No, that’s fantastic. I’m really excited. I think there’s an episode in the offing here around solar, batteries, EVs and these kinds of things and somebody referred to it as a domestic power plant. Anyway, there’s a lot going on. There was a fantastic video on this run by Fully Charged and Robert Llewellyn there. If you haven’t watched any of the videos there, please do as there’s some fantastic stuff. They basically did a tour of his house that he’d been renovating over the last 15 years or so and he’s just got everything that I could possibly dream of but he’s been there and done it. It’s really worth a look. I’ve kind of made a step forward as well. We’ve got one car. We’re very lucky to have a car. It’s a diesel estate, so a planet-wrecking piece of kit and we felt guilty about turning the engine on every day. We looked at battery electric and begrudgingly figured out we couldn’t really afford one which would do the short and the long journeys, fit the whole family in and the rest. We’ve ended up basically trading in the car that we had for an identical car but instead of being a diesel, it’s a plug-in hybrid and whilst the range is probably only about 20 miles on the battery alone, which is not much, what’s been fascinating, Fraser, is that we’ve been able to cover about 80% of our mileage over the last ten days just from that. A lot of the chat is about how big the range is and 250 miles if you’re in a Tesla and maybe 300 but 20 will get you a long way. If you’re doing the school run, popping to work and going to the shops, it does a lot of what you need. That’s been interesting.
Fraser: That is interesting.
Matt: It’s made me look at a lot of the stuff that you’re now installing like solar and solar batteries and whether we could get a hot water cylinder because we are on Octopus Go which is an off-rate system where we get power which is 7.5p per kilowatt hour.
Fraser: Oh, okay, I didn’t know.
Matt: So it’s like a gateway drug. It’s opening up a whole lot of other thinking for me.
Fraser: Yeah, I can see that and we feel it as well. We spoke about solar and we’d always spoken about a heat pump because we’re insulated to the back teeth. We did a lot of it ourselves and, again, most of my family are tradespeople in one way or another. We did a lot of that and made sure it was energy efficient. We never thought, ‘Right, that’s us.’ We thought, ‘What do we go for next?’ We always wanted solar panels with the price of energy just now. From moving, we’ve got a little bit banked and we thought, ‘Should we just use it?’ We’re very privileged and very fortunate to be able to make that decision but then we thought, ‘Okay, solar,’ and then we thought, ‘Okay, what next? When is the heat pump? When’s this? When’s that? When’s the EV?’
Matt: This is where the retrofit coordination comes in. You’re probably neither old enough nor sad enough to remember these books but, as a kid, I used to love these kinds of fantasy books where you’d turn to page 34 and at the end of it, it would say, ‘Either you accept a) the Golden Goblet of Fire, b) try and slay the dragon or c) run for the hills. Each one would make you turn to a different page number. I was talking about retrofit coordination and somebody mentioned one of these books back to me and said, ‘Yeah, it’s like one of those books,’ because your pathway through this journey of decarbonising your life, particularly your home... once you’re set on a particular pathway, you become locked in down a certain route. Now what you don’t want to do is spend £10,000 on the wrong solar battery, inverter and smart system... whether it’s the wrong heating technology. They’ve all got to link together and so you could really do with somebody quite early on to lay that journey out for you. So maybe the Dungeons and Dragons analogy doesn’t quite work [laughter] but hopefully, you get my drift.
Fraser: So what you’re saying, Matt, is that’s how we train retrofit coordinators is...
Matt: Dungeons and Dragons, yeah, exactly.
Fraser: Yeah, it’ll all come together.
Matt: Exactly. Look, there’s a whole lot of other stuff happening around us, right? I mean I’m trying to write my teaching slides on energy policy and it’s almost impossible at the moment because each week, I’m having to revise them. Today, Fraser, we’ve had an announcement from BEIS and they’re looking to impose an electricity generation windfall tax. They’re not calling it a windfall tax.
Fraser: Of course.
Matt: They’re calling it a cost-plus revenue limit. We’re not sure what it will involve. It seems to really divide opinion, actually, on this and we’ll maybe get into this when we know more detail but a lot of the electricity generators have done very well from high gas prices because, through merit order and market trading, this has dragged renewable prices higher as well and nuclear too, so there is some logic.
Fraser: On that, Matt, with Regen, there’s been a little bit of thinking internally around this. There’s a little bit of thinking externally around this but in our discussions that we’ve had with developers that we know and people who work in renewables too, there’s been a sense throughout that... ‘We’re actually doing well out of this.’ There’s a genuine, sincere sort of feeling that – ‘We could also be contributing here and giving something back here.’ Maybe that’s less cynical than the CEO of Shell announcing and saying, ‘Yeah, tax us. Please tax us.’ I don’t know if I believe that necessarily but certainly, on the renewables and the low carbon side of things, there’s been a desire to reappropriate some of that I think.
Matt: Well, it’s about legitimacy, right? So if the general public is seeing low-carbon power generators earning more than they should, maybe that would damage their legitimacy over the long run and that won’t be good for net zero but at the same time, you don’t want to dissuade investment in low-carbon power generation either. I think this will be a really, really thorny consultation and something for us to get into for a later episode I think.
Fraser: Yes, yes, I agree.
Matt: That isn’t the only policy news, Fraser. We live in the UK and it’s been...
Fraser: Ahhh... a blizzard of nonsense is what we’ve had. I don’t know, Matt. I don’t know. One thing that we have had which I’m sure a lot of our listeners will have been paying close attention to and probably kicking off about on social media is the drive to, effectively, ban solar PV farming on useable farmland. This has been the big stushy recently. The argument goes that you can provide more general value to the economy and you can do a hell of a lot for energy security and energy supply by installing large-scale solar farms. Government doesn’t want to do that, doesn’t like the look of them and thinks they’re a bit shiny and a bit naff. They think it should be used for whatever... farming beef, dairy, etcetera instead. They want to ban them completely. We should say that they haven’t implemented the ban but this is the discussion that’s happening just now.
Matt: Yeah, it seems to be the way of policymaking where you announce it many, many months before you do it and it depends if there’s a kind of like a threshold of public disgust [laughter] and if it reaches that, then they may u-turn. So I’m not sure where we are on that dial on this one but this is the whole thing about regarding the best and most versatile land and incorporating 3B or grading 3B which is quite marginal or middling land and putting that into that bucket of good quality agricultural land and that would squeeze our solar PV installation. Now, this is odd because we’ve been waiting, since 2015, to unleash onshore wind in England, I might add, and Scotland has been going great guns but we’ve had big planning regulations on this which have, essentially, banned onshore wind. They’ve also removed from subsidies the contracts for difference. It was about two weeks ago that we had an announcement from the Chancellor saying that these restrictions would be lifted and onshore wind was to sail once again on the agricultural highlands and lowlands of England. Two weeks later, they then announced this on solar PV and so it’s just so peculiar. What’s the strategy? Because why would you unleash onshore wind, which could well be on agricultural land or marginal agricultural land, particularly upland where it’s windy and maybe sheep grazing, for instance, and then ban ground mount solar?
Fraser: It’s backbench, weather-vane politics and you can see, with net zero, there’s less of an understanding publically about things like the scale of solar farming and things like the amount of land that it requires, the amount of value that it generates, the amount of energy that it generates and the role that it could play versus onshore wind which is well understood and people are thinking, ‘Actually, nobody really minds the look of them anymore.’ It was never really a massive deal in the first place. Nimbyism is not as big a deal for onshore as it has been. There’s still a bit of it but not as much as it has been. So I think the understanding and the sentiment have shifted, quite clearly, publically versus solar which feels like an easy point of contention. You put it before, off air, Matt, when we were chatting that it was given with one hand and taken away with the other.
Matt: It seems to be.
Fraser: But it’s so incredibly frustrating when you think about how cheap solar is. I think pound for pound, it’s the cheapest form of energy we can generate right now.
Matt: Before we move on to this coming episode, the last point on that is that in the leadership contest, I remember Liz Truss making reference to ground mount solar... bad and rooftop solar... good. I believe I’m correct on that. The question is what are they doing to unlock that? I know we’ve seen VAT derated on solar which does make a big difference for the installation of this but then you look again... I mean I’m in a conservation area here and I called up the council earlier this week and said, ‘Can I get my solar on my roof?’ I’m assuming this would be permitted development. They said, ‘Oh, you’ll need planning permission for that.’ I’d been through that process for double-glazing and so you think, ‘Well, if you’re going to push against one, you need to support the other.’
Fraser: Yeah, absolutely. Let’s bang the drum of the just transition just for a minute here because if you’re going to place all the responsibility for the transition largely onto households to fight with councils to install their solar, etcetera, while penalising gas boilers and while gas prices are rising, you are opening yourself up to massively increased inequalities but accepting that maybe this just isn’t something that’s on this government’s radar, right? That’s fine. That’s a position that you can take but then you run the risk of doing exactly the kind of net zero transition that Conservative backbenchers and Conservative governments have been warning about for a long time and that is one that damages or leaves people behind in the process. So you have to be willing to give support somewhere, at least beyond the oil and gas licences and the occasionally making an arse of the Green Homes Grant. You have to be willing to do something more sustained and targeted to resolve that.
Matt: Exactly and let us remember that with a lot of rooftop solar that’s going on right now, the decision is being made by owner-occupiers who are able to afford this stuff.
Fraser: That’s it.
Matt: Fraser, you would be in that category but many people don’t have that ownership, they don’t have that autonomy or they don’t have the capital in the bank to install.
Fraser: Definitely. I think an interesting point on this is that anecdotally, a lot of conversations that I have with my friends and with my family, who still live in the same kind of place that we come from where we’ve just returned to... we’re fortunate that we’re well-off. I married a solicitor. I did the right thing and did very well for myself [laughter] but for friends and family that I have, they’re all very much of the opinion that – ‘Of course, we would have solar panels and, of course, we would do all this but we don’t have the money in the bank to get this done or at least not the incentive to take out finance to get something like this done or to make this happen and reap the benefits of it.’ That’s not a reason that you need government to lead the full transition into absolutely everything itself but you need something that helps bring those people along for the ride because the appetite is there. Unless you’re willing to get a little bit creative in your policy to support that appetite, you’re going to find that you’re going to struggle to get this done at scale or in time.
Matt: Yeah, and you’re leaving people behind. So I think that segues nicely onto the episode today. We’re talking about – no surprise – the energy crisis again but we’re talking about fuel poverty, how bad things have got and what we’re doing to tackle this. Fraser, we have tackled this before but I think we have to go all the way back to April 7th for the last concerted episode on this. We also did what I found was a fascinating episode on energy poverty, the energy crisis and disability which really unpicked a lot of these but we haven’t covered this since the energy price cap announcement and the subsequent energy price guarantee policy put in place by government. For the first time, I think, Fraser, we’re starting to see just how bad things are and what the winter holds. This episode today really is asking some experts, who are on the ground and are researching this or involved in that, to tell us a bit more about how bad things have got.
Fraser: The other side of this, if we can be allowed to find an upshot for a second, is that we know how bad it is but we also have a little bit of certainty in terms of what the prices are going to be. It’s maybe an opportunity to kick into gear and accelerate our response to dealing with it now that we know what it’s loosely going to look like.
Matt: The other way of looking at it is we also know what government is prepared to do and not prepared to do. We know that they’re prepared to limit our bills on average by capping the unit price (not the total bill) to roughly £2,500 for dual fuel but as we’re recording this, they’re not prepared to fund and deploy a nationwide energy advice campaign or a big turn down campaign. So we’re seeing this energy advocacy vacuum which is being filled by lots of different stakeholders.
Fraser: There’s a really frustrating thing about this in that we’ve had some of this discussion before, and I’m looking forward to getting into it today, and we know that it works. We know, from other places, that even little bits of advocacy and little requests from government or from the regulators for households to turn down if they can or to shift behaviours a little bit tend to work. In the context of fuel poverty, of course, it’s a huge thing and we’ve got a big, black hole in support as well as advice for people who desperately need it but however seriously we’re talking about things like blackouts and demand over the winter, to not be considering this feels like...
Matt: I’m increasingly of the view that it’s not necessarily a bad thing that government aren’t running it. I just think it’s really bad that they’re not funding it. I’m the trustee chair of South Seeds and we’re doing this stuff on the ground and we are bringing people in. The last time I saw it, we had a waiting list of weeks just to have a meeting with somebody to help them pay their bills and inform them about what they can do. We desperately need to expand the number of staff that we have and also, the phone line capacity to get through to utilities to draw down that emergency funding. Underfunded doesn’t quite cut it and it’s not just us. You’re seeing these national charities like National Energy Action (NEA), who we’re going to talk to, and Citizens Advice. So if government aren’t going to throw £15m at a nationwide turn down campaign, let them throw £15m at least – why not times that by ten – at organisations at various different levels to support that messaging because I don’t think it’s a bad thing hearing this from different actors, at different times, at different levels and in different ways. On that note, Fraser, we must stop because we’re eating into the oxygen and time for our guests, so we ought to bring them in.
[Music flourish]
Jess: Hi, I’m Jess Cook. I lead the People Living in Water Poverty and Fuel Poverty Work Programme at the charity National Energy Action which is a fuel poverty and energy efficiency charity.
Aimee: Hi, I’m Aimee Ambrose. I’m Professor of Energy Policy at the Centre for Regional Economic and Social Research at Sheffield Hallam University. I’m primarily interested in how energy policy lands in people’s everyday lives.
[Music flourish]
Matt: Jess and Aimee, welcome to the pod. Aimee, welcome back to the pod, in fact. It’s great to have you back.
Aimee: Thank you.
Matt: Fraser and I were talking before here and saying that this isn’t the first time we’ve covered the energy crisis. This has been rumbling on now for the best part of a year... well, longer than a year, depending on when you say it began, but this is the first time we’ve covered this issue after the price cap rise and after the announcement of the government’s Energy Price Guarantee Scheme. Now is the opportunity for us to take the temperature of how bad things have got. I just wanted you to reflect. Maybe if I begin with yourself, Jess, given that you’re with the NEA and you are very much at the forefront of this crisis. What are you seeing in terms of the scale and reality of the fuel poverty crisis? What does it mean for millions of households today and, of course, in the coming winter?
Jess: Thanks, Matt. I think you’re right. It’s been over a year now and if we look back to where we were before the first record price increase in October last year, we had 4 million households in fuel poverty. That record increased and it rose to 4.5 million. In April, when it rose yet again, it rose to 6.5 million. That’s a massive, massive jump alone. If we hadn’t had the announcement of the Energy Price Guarantee and the price cap had risen to £3,500, as was expected, that number could have been around the 9 million mark. Thankfully, we’re in a position where it’s at 6.7 million which is still a massive increase. We’re talking 2.5 million households more than we had in September last year. Bills have doubled in that time. In just one year, the price you’re going to pay for heating has doubled and that’s massive and the impacts are huge. We’re seeing constantly people coming to us in really dire situations with nowhere else to turn and it’s just becoming harder and harder because the things that we can do for them are more limited than ever before. You want to help and we do everything we can but they are making horrendous decisions; decisions that actually are out of their control completely with what they’re doing in their daily life.
Matt: Before we come on to Aimee, what kind of decisions? What is the everyday decision-making that these households are having to walk through?
Jess: I mean everybody has heard of the heating or eating situation. Some of these households now aren’t doing either. They’re just not. We’re seeing situations where they are self-disconnecting because they just don’t have the money there to top up their pre-payment meter or they’ll self-ration to quite extreme levels because they know they can’t afford it. It’s October now and the temperature has dropped. I’m feeling the difference and I’m sitting here wearing a jumper today.
Matt: Yeah, we’re all sitting here with big jumpers on.
Jess: These households will be sat there with jumpers and coats on... going to bed even wearing a coat with extra blankets to try and keep warm because they’re doing everything they can to stop putting the heating on and that’s already in October. What’s it going to be like when it hits January or February?
Matt: That, of course, will have a knock-on effect. I’ve been seeing in the news today and also a colleague of mine, Professor Lucie Middlemiss at the University of Leeds, flagged this as an issue a few days ago about mould in people’s homes. If we’re not heating our homes, we’ve got potential health issues and so there’s a possible knock-on.
Jess: There’s a huge knock-on.
Matt: I mean that’s really shocking to hear, Jess. We’ll obviously dig into this a little bit more in a moment. Aimee, from a research perspective... obviously, it won’t just be research and you’re, no doubt, involved with practitioners as well. From a kind of bird’s-eye view, what are you seeing here in terms of how deep this crisis is but also how fast things are escalating?
Aimee: Yeah, I mean it’s absolutely – and this word has been overused but it’s absolutely unprecedented. If we look back to the days now, a couple of years ago, when we had between 3 and 4 million households in fuel poverty in the UK, I think it was really within our grasp to solve that and to eradicate it at that time. I think we’re now seeing the government borrowing billions and billions of pounds to enable the cap but also for their day-to-day spending and I wonder why we weren’t able to raise that kind of finance for a mass insulation programme to improve our resilience to external price shocks like we’re seeing. That probably doesn’t really address your question but I think we got some insight into the kind of difficulties people will be experiencing this winter during the pandemic. That put an awful lot of pressure on households in terms of energy use due to the amount of time people were spending at home at that time. Obviously, prices weren’t as high but usage was very high. We did some research at that time which showed the kind of range of coping strategies that people were employing. So it was things, like Jess was talking about, like heating or eating; eating food that’s cheaper with a low nutritional value; not having a hot meal and so just not warming food but also things like people spending as much time out of the house as possible and so spending time in the homes of friends and family who, perhaps, could afford to heat their home, or in public places, or on public transport. That sort of thing often gets overlooked, those kinds of coping strategies, but they have really quite significant psychosocial impacts on people in terms of wellbeing. We all like to retreat back home at the end of the day and kind of recover from everything that’s happened, don’t we? You know, 7 million households are going to struggle to do that this winter. Home is not going to be a sanctuary for them anymore.
Matt: No and before I hand on to Fraser, just picking up very briefly there on one of the first points you made which was around unfunded public borrowing, as it currently stands, to pay for this price guarantee. There are now suggestions that that price guarantee, essentially, is making up that shortfall between what we can afford and the price of energy which could have been dealt with through an insulation programme... to pay for that borrowing, we might be looking at public service cuts and public spending cuts. Now, a lot of what we’ve been talking about here actually is underlying our public services which very much are looking to tackle this issue in the first place. I don’t know but I’m just picking up on what you said before. Could the way that this crisis has been handled actually make the crisis worse ultimately?
Aimee: Yes, I think that’s a very real risk. I’ve been very worried to hear about the prospect of very deep cuts to public spending. The NHS is going to be on the frontline of this crisis. We know people get more ill when they can’t heat their homes to a safe and comfortable level. I expect they’re going to face cuts. Public health services across the board are needed to respond to this crisis. They’re going to be on the frontline of it and what about the government departments who are on the frontline of developing responses to the climate crisis which, of course, this problem is closely linked to? I’m very, very worried about the prospect of this and, of course, it seems bizarre in the face of record profits on the part of energy companies and energy wholesalers.
Fraser: It is and after a decade or more of austerity and cuts to public services and local authority budgets, etcetera, you have to wonder what’s left to cut at this stage in a time where reliance on those services has never been more acute or more sharply obvious I think in general. A question for Aimee first which speaks to a little bit of the work that you’ve done. In terms of the crisis itself within the wider public narrative and the wider conversation, do you think our relationship now or our understanding of energy and how we use energy and how we think about it as a public has fundamentally shifted as a result of this crisis?
Aimee: I think we will see some shift in the extent to which we’re all engaged with and understand the consequences of different levels of energy use. I think our energy literacy will probably generally improve. Energy has never been more in the news. It’s headline news. It never used to be. It used to be something very much in the background of people’s lives. I think that awareness, hopefully, will be helpful in the context of the climate crisis; if we are going to take something positive from this, a greater awareness of the consequences of energy policy and of not exiting those volatile global fossil fuel markets. If we can take away a better awareness of the consequences of those decisions not to accelerate the transition away from fossil fuels into our everyday lives, then I think that would be quite a positive thing. It’s unfortunate we have to get to this point though to raise people’s awareness.
Fraser: Absolutely, absolutely. Jess, I think awareness is an interesting thing here. We recently had the announcement of a potential campaign to support awareness and advocacy from the government that then kind of went down the tubes in a ... a blaze of glory isn’t the right phrase for it at all. It kind of just went under the carpet. Is awareness something, and advocacy more generally... I’m sure we’re aligned on this but is this something that we have to be thinking more about in the response to this crisis beyond just price controls and beyond just market reforms? Is enough being done to support the organisations like NEA who are doing this work on the ground?
Jess: Yeah, I think awareness can be looked at from a number of different angles. So Aimee was just talking there about being more aware or more energy literate, I suppose, of the changes that you might be able to make. What I’d add to that, just before I properly answer your question, is that I think for the majority of households, Aimee is absolutely right that energy literacy will probably increase and people will become more aware of the things that they can do themselves. This isn’t just energy. I mean, yes, we’re talking about an energy crisis but it’s a cost of living crisis and we’re seeing it across everything. I work a lot with the water sector and they have a lot of affordability support that’s out there but awareness of it is extremely low. So, yes, we absolutely need to do more to make people more aware of what support does exist but I think there’s the awareness on the other side as well. These larger organisations need awareness of what’s going on on the ground. They need to listen to charities like ourselves and to people actually just sharing their stories of that lived experience. They need to be a bit more aware of the circumstances people are finding themselves in and the challenges that they’re facing and being able to respond quite proactively really to them is something that I think we see now and again but I’d like to see an awful lot more of. It’s not always about putting the onus on the customer. It’s definitely about looking at what those larger organisations and even government can do.
Matt: If I can jump in here, this is something that Fraser and I were discussing just before and something I tweeted about last night. I’ve been scratching my head about where we’re at in terms of this energy advocacy. Government has basically come out and said, ‘We are not prepared to fund and lead a nationwide energy advocacy campaign or a big turn down campaign,’ or something akin to the Covid regulations, like washing your hands, space and all the rest of it. What that’s done is create a vacuum which we’re seeing lots of different actors fill which I think is a really positive thing. I might add you’re seeing folk like Martin Lewis jump in with MoneySavingExpert. We’re seeing Nesta running their boiler campaign. We’ve also seen existing organisations, Jess, NEA and we’re seeing Citizens Advice stepping up and filling that void but there’s now this kind of soup or this milieu of different organisations, many of which are echoing the same messaging but it’s quite a complex space now. Part of me thinks that’s great because depending on who you are, the language you speak and the kind of cultural values that you hold, you’re probably going to find somebody delivering a message on this that resonates with you now but at the same time, most people will look at this space and feel quite overwhelmed by it. It’s very complicated. So who do I go to? I just wanted to get your take. Maybe, Aimee, if we come to you and then come to Jess. Is this is a good or... it’s so difficult to put it in binary terms but is it a good or a bad development that we’re seeing?
Jess: My sense is actually, that the kinds of organisations you’re talking about, those voluntary community sector organisations that have perhaps plugged into specific communities that might be termed hard-to-reach, I think they would have stepped in off the back of a national campaign anyway to interpret, to add additional support and to signpost people and say, ‘This is where you can get help with your specific situation.’ I have reservations about the national campaign anyway. I’m not saying it’s a good thing to have shelved it at all because I think the motivations for that are purely financial and possibly a little bit ideological as well but I have concerns about that. I mean this needs more concerted attention through research but there are some indications from bits of research that have been done about how people respond to messages about conserving energy and respond to things like smart meters in the home. There are some worrying indications within that that it’s the people who actually are not consuming enough energy, i.e. they need to be upping their consumption of energy to be living a safe and socially and economically included life, that actually respond to those messages. They cut their energy use further still in response to those campaigns, usually because they want to try and save as much money as they can. So I would be quite worried about a blanket campaign that tells everybody to turn down the heating or whatever it is because people’s situations are very different. There are people out there who really do need a warmer home than the average individual because of healthcare reasons and all sorts of reasons. The one-size-fits-all nature of a campaign like that, which was inevitably going to be one-size-fits-all, might improve energy literacy but it might also result in people reducing energy consumption to dangerous levels. Why aren’t we targeting those profligate users of energy? We know where they are. We know who they are. Why not a specific campaign targeted at high consumers?
Matt: That’s fascinating, Aimee, and again, maybe the parallels I drew with Covid are not fair in terms of a campaign because maybe a one-size-fits-all would work better for a pandemic situation, although, of course, people were more exposed to the risks than others. Jess, you’re in the middle of this. You are a big player in terms of messaging and how you can help people reduce their bills during this energy crisis. How have you seen the advocacy space change or even the way that you’re delivering advocacy? You mentioned that you’d set up an online portal chat function. Is this changing or are you just doing what you were doing before the energy crisis but just more of it?
Jess: We’re doing an awful lot more of the conversations that we’re having with the people who are struggling the most. We’ve always worked with low-income households and fuel-poor households. We’ve always delivered projects with them but now we are speaking to far more of them on a day-to-day basis than previously because they don’t know where else to turn. They see our name in the media being mentioned by others that they maybe are trusting, so that’s one of the key things I think with anything with advocacy and getting those messages in that campaign. It depends on who that individual trusts as to who they’re going to listen to. That’s not necessarily going to be their energy supplier or network. It’s not necessarily even going to be government. It’s going to be probably the people that they know will support them, such as charities, and they’re more likely to listen. So we’re definitely seeing more that we’re speaking to on an individual basis. We’re very mindful of the messages that are going out for the exact reasons that Aimee mentioned. Our client base, particularly, is that low-income group and the chances are, they’re already self-rationing and possibly disconnecting to some quite dangerous levels and we wouldn’t want them to do that anymore. Actually, what we want them to do is to access the support that’s out there and get the most out of the energy that they do use at home rather than reduce it. I think that’s a really different message. What I will say though is that I do think that there is a requirement for a national message to go out, however that’s delivered, and that for me, at the moment... the one that’s the most important to go out is around the energy price guarantee and the fact that it’s not a £2,500 limit on what you will spend. We’ve had people and we’ve seen it on social media and in conversations...
Matt: Well, even our Prime Minister made this slip.
Jess: Even our Prime Minister. Even conversations with my friendship group where they have thought, ‘It is £2,500. I can use as much as I want and I won’t pay anymore. You know, actually, I could afford that. I could budget for that. It might be a squeeze but I could do it.’ That’s not the case at all. That £2,500, as we all know, is a typical household. Who is a typical household? We know what that means in regards to kilowatt hours used for electricity and gas but you’d have to look at your own individual bill to understand if that’s you and it’s very unlikely that it’s going to be you. We’re in a situation where we use less gas than the typical household but we use more electricity than the typical household in my house. So I don’t even exactly match that and I’m aware of the energy that I’m using at home and I work for a charity that looks at this. We need that message to go out. If you use more, you’ll pay more. If you use less, you’ll pay less but you need to do so in a way that’s safe and keeps you safe at home. That, I think, is something where we could have national messaging to make that far clearer.
Fraser: Given this distinction then, Aimee, and given how there are obviously different people, different situations, different communities and different groups, however you want to delineate, is there a greater or maybe a more important role for local within this crisis in terms of how we’re tackling it and how we reach people to deal with it?
Aimee: Absolutely. I think what we really need here, which has been a message coming out of your podcast for some time, is radical system change. We need to decouple ourselves from these volatile international fossil fuel markets. It’s absolutely crystal clear that the price of producing renewable energy has not changed throughout this crisis. It is considerably and vastly lower than the production costs associated with fossil fuels. So it’s a no-brainer and we need to transition to a primarily renewable energy system that is within our control. There’s all this emphasis on energy sovereignty and that is the way to achieve energy sovereignty. That’s looking like a long way off. Things like cancelling the green levies associated with our energy bills really concerns me in terms of how much that will set us back with our progression towards a renewable energy system. Let’s act locally where we have got the scope to act. Local authorities are really, really squeezed in the UK financially. I think many of them are on the verge of declaring bankruptcy but I would like to see more leadership on the part of local authorities and locally active organisations in spearheading this transition. Let’s break free from the system that’s causing us all these problems.
Matt: On that, I think this coalition of the willing is something that may fall out of this energy crisis where you’ve actually got stronger group and allies in this space that have had to work together during this energy crisis but almost against the grain of support. I mean local authorities are obviously stripped to the bone after austerity and unable to fund the necessary staff and resources to lead those campaigns but hopefully, something may fall out of the back of this. I wanted to come back to something, Aimee, that you’d said and also hear from Jess on this. One of the big things I’m finding, and I probably fit this category and I don’t like using terms of class but...
Fraser: Use it! Say it loud, say it loud.
Matt: Okay, whatever we want to call it. I’m middle-income and I’m concerned enough about energy prices and also environmental issues that I’m trying to reduce my energy consumption but I’m not in that fuel-poor category. So what I’ve done, and other people in this bracket have done, is invest (as a capital expenditure) to reduce operational expenditure. They’re investing in things like microgeneration, plug-in hybrid or an air fryer to reduce their long-term consumption. There’s that band. If you looked at the news yesterday, some of the stuff that’s flying off the shelves at Currys and John Lewis are these appliances but you have to have the capital to invest in them. So that feels like a completely different band for messaging, and something we should positively encourage in my view, versus the band which is unable to afford that. Jess, maybe I can begin with you. Is this something you hear at National Energy Action? You’re a fuel poverty organisation and deal mostly with that band who are unable to afford the capital expenditure to reduce the operational expenditure but have you also got that other band that you weren’t normally contacted by before?
Jess: Yeah, I think we do. It’s something that we’ve been seeing. To be honest, we’ve probably been seeing middle-income households since the beginning of the pandemic. It’s hard to differentiate entirely but you’ve got, say, the lower end of your middle-income households and those that might have been those just about managing households maybe and suddenly, there’s a change to their income due to the reduction with furlough or things like that and they suddenly noticed a massive difference and suddenly were unable to manage in the way that they had been before. That impact then happened on the middle-income households where, because of furlough, incomes were limited and their mortgage payments, for example, were a rather substantial proportion of what they were taking in on a monthly basis, so their lifestyles changed. We’ve actually seen this now for a couple of years. Now this time, you are absolutely right. With the way that the energy crisis has hit, middle-income households more than ever before are feeling the impacts and it’s not a group that knows what they’re doing. They don’t know how to respond in the same way.
Matt: It’s fascinating, yeah.
Jess: Low-income households, particularly very low-income households, are amazing at budgeting. You get these messages that are coming through sometimes from government that they need to be more savvy with their shopping and they need to be not buying the more expensive products. I tell you now, they know every single penny and where it’s going and every penny matters.
Matt: Aimee, anything to add on this just in terms of that kind of messaging? You mentioned before about different campaigns for different groups and different circumstances.
Aimee: Yeah, I think it’s really interesting that perhaps that middle bracket of households is reaching out to the technology basically to get them through this transition. In my view, it’s potentially the wrong technology that they’re reaching out to. I think, in all of this, we’ve got to get the balance right between solutions that help us now and also solutions that will give us greater resilience to these kinds of price shocks and exogenous shocks in the future. I suppose it very much depends on the budget you’ve got available to you but if you’re able to insulate your home and potentially, install something like an air-source heat pump if it’s suitable for your property and in your area, it’s a big investment but it’s going to stand you in better stead to weather these storms which will keep on coming. As the climate crisis unfolds and the geopolitical situation doesn’t look to be any better, we need to be looking to the long term as well as these sorts of sticking plaster fixes like one-off payments and air fryers or whatever they may be. If we’re borrowing billions for general government spending, can we not borrow billions to give the most vulnerable households an insulation programme and an air-source heat pump or whatever the most suitable technology is?
Matt: It sounds far too sensible, Aimee.
Aimee: That’s why I’m not running the country [laughter].
Fraser: I think this is part of the key conversation as well. We had a conversation about it before and, Aimee, I dare say there is certainly research out there about it and if you’re effectively leaving people to their own devices within thinking about the transition longer term and leaving it to people to buy their way out of it, you’re going to have a huge gulf in terms of who gets to reap the benefits and who doesn’t get to reap the benefits.
Aimee: That’s what we’ve always done in this country in terms of transition and actually, beyond this country as well. Generally, energy transitions have been those who can pay to participate have benefited first. I’m sure Jess will be aware of this from the work that the NEA has done. We’ve still got communities in this country who haven’t participated in the last energy transition to gas central heating for lots of different reasons but partly because of the cost barriers to participating. We need to reverse that this time around but it doesn’t look like it’s going to happen.
Fraser: This was the question that I was coming to. We often have this framing of... if we’re going to do net zero, it’s going to harm the working class and it’s going to harm lower-income households. I don’t want to ask you what the tensions are there. I want to ask you how we put those communities and those households at the front of this to enable that just transition so we don’t make those mistakes again.
Jess: Yeah, I think, first and foremost, we should be talking to them and we should be engaging with them. No changes should be forced on a household. They need to make sure that they’re suitable for that household and they all have individual needs, whether they be health needs, levels of comfort or financial needs, we need to take all of these into consideration. It’s really important that we don’t leave anybody behind in a net zero transition but it’s also really important, I think, that we start with the worst first. We’re talking about an energy crisis here. What can you do to stop this being something that happens in the future? You address the fact that we have the least efficient housing stock in Europe. If we’re going to achieve our net zero targets, we’ve got 85% of the 29 million homes in the UK that potentially need to be retrofitted. You need to do that at a rate of 20,000 properties a week and we’re doing 20,000 properties a year. It’s a massive increase that we need but you need to start with the people that are in the least efficient homes to have the biggest impact. That’s not just the biggest impact on bills. It’ll have a huge impact on bills but it’ll have the biggest impact on trying to progress the transition as well because you’ll have less energy wasted, so it totally makes sense to start with those households. I talked a little bit earlier about the price guarantee and how, if you use more, you pay more. Some people are using more because they live in such an inefficient home, like a Band F or J home. They’re not paying £2,500 a year. They’re not paying £3,500. Some of them are up at £8,000 a year because their homes are just so inefficient. So we have no choice. We have to look at that and we have to support people to be able to access those changes and do so in a way that they feel comfortable and that the benefit outweighs the risk.
Fraser: Absolutely, absolutely. Aimee, the same question.
Aimee: Yeah, I’m really not a fan of the term that is particularly prevalent when the European Commission talk about the transition of leaving nobody behind. I think, for me, it’s about who we need to bring along first and we’ve got pretty good insights actually into who is struggling the most. As Jess said, we know that we have a hugely energy-inefficient housing stock and we tend to know which housing archetypes are the worst affected in that sense. We tend to know who the fuel poor are or who is most vulnerable to fuel poverty and where they are. We need to pay for the transition for those households; yes, not against their will but working with them and there needs to be a lot of awareness raising of the multiple benefits of carbon reduction for energy bill resilience and for health and wellbeing associated with major insulation interventions but then we need to fully pay for this with no VAT reductions or subsidies around the margins that will only make a difference to those of us on middle incomes. We need to get in there and we need to pay for these people to transition as soon as possible. We’ve run out of time now and we’re already seeing the kind of nightmare scenario in terms of our lack of control over our energy prices that we’ve been fearing for a long time. We’re almost out of time on limiting global warming to 1.50C as well. There’s no more time. Just borrow and pay.
Matt: We’ve almost run out of time for the pod but we do have enough space, so tomorrow, there is a Cook/Ambrose, Chancellor/Prime Minister coalition. You’re head of the country and I don’t mind who takes the top job. I’ll let you figure that out but you’ve got the option to impose one or two key policies tomorrow to change direction or, at least, maybe you want to keep the momentum going in the way that we are. Maybe if we begin with Jess. What would you be doing differently? What would have the biggest impact tomorrow if we could change anything?
Jess: I’d two things and I think I might have talked about both of them during this podcast. First of all, I’d be listening. I think so many decisions at the moment seem to be made without truly considering the impact on those people who are struggling. If they just took a little bit of time out to actually listen and to understand those real-life experiences of the people that they represent, then we might actually see a little bit less backtracking and more policies which deliver valuable, targeted support. I think that’s one that’s really important; the targeted element. Secondly, for me, I believe that we can find a balance and I’d be looking for that balance. I do support growing the economy. It’s absolutely needed. Look at the state that we’re currently in and in the long term, it can have a significant impact but you can’t do that to the detriment of others. You can’t grow something that works for some of the population but doesn’t for others and others can’t participate. So you’ve got to introduce those measures and policies that deliver that balance by helping the people that need it the most and helping them to participate in the growing economy and that’s where my focus would be.
Matt: You’ve got my vote. Aimee, please.
Aimee: Jess and I might have a few things to reconcile if we were going to co-govern, only in the sense that I think we need to end our growth reliance to solve all of our problems. I’m a bit of a proponent actually of degrowth because we just don’t see an even distribution of wealth and resources under a growth-based economy. I don’t agree that growth is the way out of this but I agree with everything else you said, Jess. The main thing I would focus on is taking the profit element out of things that are absolutely essential for life, such as energy and water. That might involve renationalisation. I would fully fund the transition for the most affected households, as I said earlier, and I’d like to see also a greater focus on reducing the consumption of high-consuming households, so there’s a more even distribution of resources.
[Music flourish]
Matt: Well, I, for one, welcome our new leaders and Jess, Aimee, thank you so much for your time. It’s been an absolute pleasure. You’ve been listening to Local Zero. Thank you to our guests. We’ve had an excellent time covering what promises to be an issue which will rumble on and on. If you haven’t already, please go and follow and find us @LocalZeroPod on Twitter to get involved with discussions over there. If you want to have a longer natter, please email us at LocalZeroPod@gmail.com. We love hearing from you and if you can, please, please do take a couple of minutes to leave us a review on Apple Podcasts and tell us what you like or what you don’t like so we can tailor the experience more towards what you want and what you want to hear but until the next time, thank you and goodbye.
Fraser: Goodbye, bye, bye, bye, bye.
[Music flourish]
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