There is a way to stop British families freezing this winter – just look at Belgium
Since 2002, eligible households have been shielded from price fluctuations in the energy market. People don’t have to struggle
The cost of living in Britain is currently, and has been for some time, in crisis. A year ago, research revealed that consumers were already feeling the strain as the cost of basic necessities and energy bills rose rapidly, with the poorest households being disproportionately impacted.
We have been waiting for a long-term, sustainable solution to the poverty premium—the additional cost of being poor—for the past twelve months. Since then, millions of the world’s poorest households have fallen into fuel poverty, which means they now spend more than 10% of their income on energy. In a sad irony, persons receiving universal credit are four times more likely to use prepayment meters, one of the most expensive methods of paying for energy.
The situation in the UK appears dire and unnecessary from the continent. The cost of living in Britain remains among the highest in Europe notwithstanding government initiatives. Simply said, the collective efforts made since February to address this situation have not been well focused. The UK government would benefit from taking a cue from its neighbors in this regard.
Since 2002, the energy market in Belgium has utilized a social tariff, which protects eligible households from price fluctuations and allows them to purchase gas and electricity at some of the lowest prices in Europe. Eligible households are typically those with low incomes and/or those receiving government benefits.
The cost of a kilowatt hour (kWh, the standard billing unit for energy) is heavily influenced by prices on foreign markets, like most other European markets. But the Belgian government centrally protects the social tariff. During the pandemic, Belgium’s government expanded the number of people who received the social tariff as the growing wholesale cost of gas started to have an impact on the cost of bills everywhere. Nearly one in five households, or about 2 million people, currently have this insurance, which is an increase of more than 100% from 2020.
These households spent 29% less on electricity and 67% less on gas in September 2021 than the national average. Anyone with a gross yearly income of €20,000 or less, pensioners, single-parent families enduring financial hardships, and benefits last year had their expenses reduced by at least €720. Additional regional actions led to further bill reductions for many more people.
Every three months, the Commission for Electricity and Gas Regulation sets the social tariff discount. It is set below the lowest commercial rate that energy providers are willing to give. However, an additional price cap for the tariff is established in cases when the price of electricity or gas would increase by more than 10% or 15%, respectively, from the previous period’s price. If the tariff is 20% or 25% over the average for the previous year, another cap is implemented.
Importantly, it is automatically given using administrative data stored by the government and is paid by every qualifying family at the same rate regardless of energy provider or network management. Fewer households are need to actively apply for it.
The regulator gives those who no longer qualify for the tariff the option of keeping their current energy contract or switching to the cheapest commercial fixed-price or variable-price offer. Suppliers are expected to provide advance notification of when this occurs so that customers can make plans. The cheapest deal is automatically selected if the buyer doesn’t make a decision in a timely manner.
Even if a customer is not eligible for the social tariff, the Centres Publics D’Action Sociale (public social services centers, CPAS) in Belgium are available and paid to assist them. Energy-efficiency initiatives are prioritized over social tariff money in the nation, and improving housing insulation is seen as a crucial component of the battle against energy poverty.
Thousands of people nevertheless gathered in Brussels this week to protest price increases despite these progressive plans. Prices for gas and electricity are increasing throughout Europe and beyond, which has an impact on all of our expenses. A large number of people will be affected by this. However, a social tariff lessens the burden on those who are most in need of money.
The UK urgently requires specific action to reduce the high cost of bills for low-income households, just like Belgium. To avoid poverty and desperation, these households, which are suffering from the cost of living crisis, require extra, strengthened protections on top of those already in place.
Up until this point, direct government assistance to lessen the financial strains on British homes was distributed equally among the rich and the poor. Households that are not even close to sliding into fuel poverty have received money to assist address the cost of living crisis. The new government’s major energy announcement appears to have the same effect. The “energy price guarantee” locks in the average annual cost of an energy bill at £2,500. Bills will still be double what they were last year even though this lowers the cost of winter bills for everyone – affluent and impoverished alike. Still, there will be a significant rise in fuel poverty.
However, we only need to look at Belgium to understand that there is a very real chance for an alternative, one that focuses support and price protections on those who are most at risk of poverty and those who have cold houses during the winter. In addition to the energy price cap, a social tariff established across all suppliers would accomplish this. Then and only then will we ensure warm, cozy homes for everyone in Britain this winter and end needless misery.
YOUTUBE VIDEO: Britain’s Difficult Winter: How Bad Will Things Get?
By: Miss Cherry May Timbol – Independent Reporter
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