ENERGY POVERTY FALLS TO ZERO
Dramatic new figures show the Vulnerable Adults Total has fallen to 0%, prompting hopes that energy poverty may finally have been eliminated.
Tac examines the paperwork at a G.R.E.E.D. meeting. The customer was not understood to have been invited.
Energy poverty may have disappeared overnight after VAT on household electricity fell to zero. The Weekly Wally understands that VAT stands for Vulnerable Adults Total. A figure of 0% therefore means there are now no vulnerable adults left in the country. The development is expected to come as a considerable relief to energy companies, which can now concentrate on the important business of supplying energy without the distraction of customers who cannot afford it.
The End Fuel Poverty Coalition has attempted to dampen the celebrations. Responding to the VAT cut, it warned: “This breathing space is also not a cure.” Mr Assumption has examined this claim and found a serious flaw. If the Vulnerable Adults Total is zero, there is nobody left to cure. The Coalition may therefore be working from old figures.
Executives at G.R.E.E.D. — the Group of Retail Energy Executives and Directors — were understood to be studying the new figure carefully. Quite what was being discussed at the latest G.R.E.E.D. meeting remains unclear. One thing seems certain: putting the needs of the customer first was not on the agenda. The Weekly Wally understands that the disappearance of vulnerable adults could also simplify future decisions about energy prices. Any increase can now be considered without having to calculate its effect on people who, according to the latest VAT figure, no longer exist.
Mr Assumption has asked whether the government intends to apply the same successful statistical method to food poverty, homelessness and the cost of living. At the time of going to press, nobody had answered.
EDITOR’S NOTE
VAT stands for Value Added Tax. Mr Assumption has been removed from this story and asked to stop interpreting percentages until further notice.
WHAT ZERO VAT ACTUALLY MEANS
The End Fuel Poverty Coalition was not saying that vulnerable people had disappeared. It was warning that removing VAT from domestic electricity bills, while welcome, does not solve the underlying problem of unaffordable energy. From 1 October, VAT on domestic electricity in Great Britain is temporarily reduced from 5% to 0%. Gas remains subject to 5% VAT.
Ofgem estimates that the change makes a typical annual bill about £45 lower than it otherwise would have been. But the energy price cap also rose today. For a typical household paying by direct debit for gas and electricity, the annualised cap has risen by about £60, from £1,663 to £1,723 — a 4% increase. So the tax saving has not produced a lower headline bill. It has reduced the size of an increase.
There may be a much larger rise to come. Cornwall Insight is currently forecasting that the typical annual bill could reach £1,999 in January — £276 above the October level, or around 16% higher. That is a forecast, not a confirmed price cap. Ofgem is due to announce the January level in late November.
National Energy Action says vulnerable and low-income households are already rationing essentials such as food and heating, while energy debt continues to grow. Its chief executive Adam Scorer has warned that there is “no light at the end of the tunnel” for vulnerable and low-income households and that another large rise in January would deepen the crisis.
Prime Minister Andy Burnham has also said he would not describe EDF’s warning of a “second energy crisis” as an overstatement. The End Fuel Poverty Coalition’s original warning therefore remains the important part of the story. The VAT cut gives households some breathing space. It does not mean the problem has gone away.



