Cost of living: Thousands will die this winter as energy companies 'rake in billions', experts warn

Electric bill charges paper
The UK will be hit by a “significant humanitarian crisis", a new report has warned. (Getty) (bymuratdeniz via Getty Images)

Thousands of people could die and millions of children suffer this winter because they are unable to afford energy bills, a new report has warned.

The UK is facing a “significant humanitarian crisis” if the government does not act to prevent more than half of households plunging into fuel poverty, according to a report by the UCL Institute of Health Equity (IHE).

It also condemned the extraordinary profits made by the UK's gas producers and electricity generators, amid reports that energy companies could make £170bn in profit in the next two years.

It said high fuel costs and rising poverty were damaging health and this would worsen over the coming months.

It is feared that thousands of extra deaths could occur and the health and development of up to 10 million children could be affected directly or indirectly as a result, the report said.

Read more: Energy inefficient homes face £1,730 bills rise

EMBARGOED TO 0001 WEDNESDAY AUGUST 17 File photo dated 19/11/14 of an elderly lady with her electric fire on at home.
Ofgem has announced a rise in price cap for around 24 million households. (PA) (PA)

Last week, Ofgem announced a rise in the price cap for around 24 million households in England, Scotland and Wales, sending the average yearly bill from £1,971 to £3,549.

Inflation increased to 10.1% in July, the Office for National Statistics (ONS) said - the highest level for 40 years.

The Child Poverty Action Group (CPAG) estimates that by January 2023 more than half of UK households (15 million) will be in fuel poverty – spending over 10% of net income on fuel.

It adds they will spend £37.51 above the 10% threshold on average, and there were also considerable regional differences in fuel poverty ranging from 47.5% in London to 71.7% in Northern Ireland.

Definitions of fuel poverty vary across the four UK nations, but are based on household income, the affordability of energy and the energy efficiency of a home.

Recent government estimates suggest that 13.2% of English, 12% of Welsh, 18% of Northern Irish and 25% of Scottish households experience fuel poverty.

Watch: Protesters gather outside Ofgem HQ calling for ‘payment strike’ on energy bills

IHE director Professor Michael Marmot, who is leading the Fuel Poverty, Cold Homes And Health Inequalities review, warned that growing up in cold homes would have “dangerous consequences” for many children now and into adulthood.

He said: It is an absolute travesty that energy companies are raking in billions of pounds in profits and tax cuts are being suggested while half the population is facing shortened lives and severe hardship through no fault of their own.”

Prof Marmot added: “The government needs to act, and act right now.

“It’s clear we are facing a significant humanitarian crisis with thousands losing their lives and millions of children’s development blighted, leading to inequalities that will last a lifetime.”

On Tuesday, Boris Johnson insisted that generous help for households had already been promised and confirmed his successor – Liz Truss or Rishi Sunak – would provide more.

Frontrunner Truss is considering targeted support for lower income households and tax cuts as mitigations against the cost of living crisis, according to a BBC report.

Leadership rival Sunak, who announced the £400 rebate scheme in May when he was chancellor, has pledged more direct support should he become PM.

Read more: Food banks warn surge in demand will prevent feeding hungriest this winter

EMBARGOED TO 0001 FRIDAY AUGUST 26 File photo dated 03/02/22 of an online energy bill, as almost half of Britons questioned on the UK's current energy crisis blame the Government more than the energy firms, according to a new poll.
People will struggle to pay their energy bills this winter. (Getty) (PA)

Fuel poverty has been rising since 2020, in part because of the soaring cost of energy, with Prof Marmot calling the way the energy market works “crazy”, and companies’ profits “an absolute travesty”.

He said it takes so much energy to heat a home because “we’ve got such substandard housing”, calling the government’s decision to stop improving insulation “remarkable”.

Cold homes adversely affect children’s development and cause and worsen respiratory conditions and mental health problems.

There could also be indirect effects such as child abuse as families face “intolerably stressful” challenges in keeping their children fed and warm, the report said.

Estimates suggest around one in 10 excess winter deaths in England are directly attributable to fuel poverty, and more than a fifth (21.5%) attributable to cold homes, the IHE report says.

Last winter in England, there were an estimated 63,000 excess deaths, including deaths from coronavirus, with around 6,000 estimated to be due to fuel poverty.

The scale of the crisis means that help aimed solely at the poorest “will not be enough”, although poorer households should receive proportionally more help, the IHE said.