Over the past few years, I have heard from many constituents who are struggling to heat their homes or power their businesses amid spiralling energy costs. This winter has sadly been no different.
The situation has got worse and worse with energy prices soaring and the numbers of people in fuel poverty rising. For many, very high energy prices are a daily worry. Indeed, 90% of adults in the UK are concerned about the continued rise in energy prices. It is fundamentally unjust that being able to heat your home or your small business in the depths of winter has become a luxury rather than a basic necessity.
We cannot ignore this crisis. That’s why I took this all-important conversation to Parliament by hosting a Westminster Hall debate on the cost of energy last week. Bringing this issue directly to the attention of the government is a vital step towards securing a fairer deal for billpayers across the country.
We know that the recent spike in energy bills was exacerbated by our failure to sure up the UK’s energy independence before Russia’s assault on Ukraine. Bills rocketed because we were left vulnerable to volatile overseas fossil fuel markets. It is essential that we secure our own energy independence by investing in the clean renewables close to home. Not only will this guarantee our energy security, but it is also an important step towards reducing CO2 emissions which still increase year on year, heating up our planet and causing hugely damaging climate change.
But there is also a problematic pricing structure to blame for our costly energy bills. As things stand, households pay roughly the same amount for both their gas and electricity bills. Yet people tend to use over four times more gas than electricity, making electricity in the UK four times more expensive than gas. While we know that electricity is a much cleaner form of energy compared to gas, this massive pricing imbalance puts the vast majority of people off using electricity to heat their homes.
The key reason for this is that carbon taxes – a tax which encourages consumers to opt for products with lower carbon emissions – are placed on gas used for electricity generation, rather than gas used for heating. This encourages billpayers to continue using gas because it is cheaper, rather than switching to cleaner forms of energy because they are currently more expensive. This perversely undermines the government’s aim for a sustainable future.
We can hardly be surprised that amid an ongoing cost of living crisis, bill payers continue to opt for gas to heat their homes.
Let’s look at the numbers – they clearly depict how this inflated pricing structure is hampering our journey to Net Zero. Heat pumps, powered by electricity and used in everything from radiators to underfloor heating, are one of the most technologically advanced, economic and environmentally friendly ways to heat our homes. They are four times more energy efficient than gas boilers and could help consumers reduce CO2 emissions by 75%. And yet just 1% of UK households have a heat pump.
It is clear that in order to get to the crux of the issue causing expensive energy bills, we need to decouple the price of gas from electricity. This could come in the form of a Levy Control system which would have two rates – one for electricity and one for gas – set by government Ministers at appropriate levels. These rates would be based on the cost per kilowatt-hour, so more energy-efficient technologies, like heat pumps, would have lower taxable amounts, making them more affordable in comparison.
And let’s not forget the ongoing campaign for more community energy. Scaling up community energy has the potential to power 2.2 million homes and save 2.5 million tonnes of CO2 emissions. Yet we continue to ignore this golden opportunity, looking to community energy for less than 0.5% of our total electricity generation capacity.
The government have a very pressing issue on their hands – addressing the high cost of energy. The Energy Security and Net Zero Select Committee, of which I am a member, will hold a new inquiry into energy bills soon and are currently accepting evidence submissions to examine whether bills are fair for all consumers. It’s clear that fundamental changes are required from the way bills are structured to where our energy comes from so that we can better support households and businesses to transition to clean energy.
We must turbocharge the shift to sustainable forms of heating that are affordable for everyone.
A warm home should be a necessity, not a luxury
