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On a cold morning in early February, Edward McEwan approached Arnold Hill Spencer Academy on the outskirts of Nottingham, England, but he did not go inside the school where he normally teaches history to teenagers. McEwan, who has taught for a decade, joined colleagues at the school’s gates striking for better pay amid the rising cost of living that he said has paralyzed his ability to live a normal life.
McEwan wasn’t alone. That first Wednesday of February saw the largest coordinated industrial action in decades in the United Kingdom, with up to half a million workers including nurses, civil servants and train drivers staging mass walkouts across the country, demanding pay increases in line with inflation and better working conditions. The size and intensity of the strikes hitting Britain have been building for months, with the U.K. statistics agency saying recently that December had the most days lost to worker actions since 2011.
Teachers’ pay levels have been squeezed since 2010 – falling 13% in real terms in England for experienced teachers and 5% for entry-level teachers since 2010 – thanks to pay freezes and salary caps under austerity government policy. But McEwan said due to the soaring cost of living in the last year, he isn’t able to do basic things anymore, like fixing up his lofty early 1900s house or paying back his student loan; he even gave up his car. So McEwan joined a picket line for the first time at his school.
McEwan’s energy bills, in particular, have been especially hard on him, more than doubling in the last year. His energy supplier has projected the total cost of his utilities would be £2,800 ($3,347) this year, compared to £1,200 this time last year. His monthly average bill stands at £220; last year it was around £100.
“I’ve not really been able to put much into savings and I was trying to get some work done in the house. I’ve sort of given up thinking about paying off my student debt now,” McEwan said.
McEwan’s story is just one example of how the European energy crisis has impacted lives on the ground. The Russian invasion of Ukraine has pushed up gas prices across the continent, crushing the personal finances of consumers. In the U.K., people started to feel the pinch before the war started, in the second half of 2021, when wholesale energy prices rapidly increased. Consumers were initially protected by the U.K.’s energy regulator, the Office of Gas and Electricity Markets, imposing a price cap limiting the maximum amount an energy supplier can charge a customer. After the war began, in April of last year, the cap was raised by 54% and then another 80% in October 2022.
Even with government help and the tumbling of natural gas prices from their highs, U.K. households are paying an eye-watering average of £2,500 just for gas and electricity a year, and the expectation is that prices will rise further. At 10% year-over-year using the international standard of harmonized index of consumer prices, U.K. inflation is 4 percentage points above that of the U.S., and even higher than inflation in Germany, which directly received natural gas from Russia before the invasion of Ukraine.
For his part, McEwan is still having to cut back on his energy usage.
“I’m trying to balance having the heating on enough, but trying not to worry about the bills. And I’ve had issues with the boiler recently. I’m expecting to have to replace that this year, which is going to be… fun,” he said.
Nevertheless, McEwan maintains that he’s one of the lucky ones. He hasn’t needed to use a food bank or warm bank, community spaces that have been set up by the U.K.’s National Health Service, charities, libraries and museums for people to keep warm amid the energy crisis. Plus, McEwan’s Victorian-era house became eligible for a local green initiative, subsidizing solar panel installations.
“There have been some positives like that. I don’t think I’ve seen any kind of change in the bills yet, because the solar panels were only put up in October so maybe in the summertime,” he added.
Though similar renewable initiatives are popping up around the U.K., which could bring down bills in the long-term, the short-term issue of exponentially rising energy bills is a huge issue for many. While wholesale gas prices have come down in price, suppliers haven’t yet passed on the lower costs to customers due to the structure of the market.
Teachers at Arnold Hill Spencer Academy on the outskirts of Nottingham, England, demanding pay increases.
EDWARD MCEWAN
‘Our energy bills are mad’
In the U.K., the impact of high energy prices has further fueled frustration with rising consumer prices generally and the feeling that wages are simply not keeping up with inflation.
Bianca Griffini, an anthropology PhD student at Goldsmiths University in South-East London, hit the picket lines protesting the low pay of university lecturers earlier this month.
Griffini relies on funding through her PhD program, which until recently paid around £1,500 a month. Late last year, she and her peers were awarded an extra £160 a month as a cost of living pay-out following a round of protesting. But she said the pay boost doesn’t go very far and barely helps her confront rising prices.
“It’s not easy. I’m only allowed to work 10 hours a week so I’ve taken up another [teaching] job at University College London,” she said.
Griffini also lives in a “typical London house,” which is code for a home that is not well insulated.
“There’s wind in the house with the windows closed,” she said. “The landlord doesn’t fix anything and you’re even concerned about asking for things to be fixed in case they actually do it and then raise your rent.”
Poorly insulated homes are a common issue for U.K. residents, who often live in Victorian-era houses that were built in the 1900s to be drafty to let coal-fired pollutants out. Studies have shown that U.K. homes lose heat faster than houses in other European countries due to poor insulation. In Britain, newly built homes tend to be well insulated and generally better suited for modern living.
Becky Fenton, a physiotherapist, recently got a mortgage with her partner in a newly built home in London. She said she’s “more fortunate” than others because the house is well insulated, but they still cannot afford to put the heating on.
A grassroots effort helped popularize warm banks in the U.K. this winter, providing communities with places to keep warm.
ANVIKSHA PATEL/MARKETWATCH
“We just wear blankets,” Fenton said, adding that the higher cost of living has caused her to put off home improvement projects and other discretionary expenses. “Our energy bills are mad and obviously our food bills have gone up. We’re not able to do stuff for our new house because we can’t afford it. We haven’t got blinds, that sort of thing.”
Fenton joined other picketers at King’s College Hospital in South London on a recent February weekday to make her struggles known. She said physiotherapist pay is between 12-12.5% behind inflation.
“They offered us 43p (pence) extra a day, and it was like ‘what is that going to do?’ It’s not like we’re asking for loads, we just wanted more of an increase and more of a fair representation of what we do,” Fenton said.
Nurses and other healthcare workers in the U.K. are increasingly choosing between food and fuel, according to a survey by healthcare tech firm Florence. Pressures on household bills also mean more people are falling into fuel poverty, which is defined as a household paying more than 10% of its income on energy.
The latest government statistics show 3.2 million U.K. households were in fuel poverty in 2020. A fuel poverty charity, National Energy Action, estimates the number of British households in fuel poverty increased to 6.7 million as of Oct.1 2022, and will likely rise to 8.5 million households in April, after the government’s new energy price cap comes into effect and households will be paying an average of £3,000 a year for energy.
Fuel poverty-stricken households are more likely to be using prepayment gas and electricity meters, where people top up their meters using a card at their local store or online, which is inserted into the meter. When the card balance runs out, the meters automatically disconnect, leaving people without heating, lighting or hot water. It’s also a more expensive option than paying via monthly direct debit, which usually offers discounts and cheaper deals with energy suppliers.
U.K. charity Fuel Bank Foundation reported the average monthly cost of topping up a meter rose to £282 in January 2023 compared to £183 in January 2022. They estimate there are now around 4.5 million homes with a prepayment meter in the U.K.
Essential service workers in the National Health Service, such as ambulance staff, have been increasingly turning to charities and their unions for help with energy bills, as the risk of falling into fuel poverty intensifies.
Some first responders in the ambulance service have been reaching out to their union’s charity branch, There for You, to apply for financial assistance for things like general living costs and utility bills. In the application, members are required to list the financial problems they’re facing as well as a detailed breakdown of household expenditure and debts.
The There For You charity also sponsors an Energy Support Fund, which will open up again this March to applications. Its last round of support received 4,000 applications.
Union members have increasingly been requesting help from the union’s welfare officer to fill out applications for grants, according to Tim Fisher, a paramedic at Deptford Ambulance Station in South-East London and vice chair for Unison union’s London ambulance branch.
“I’m on our branch committee and our welfare officer has never been so busy with requests for support. She helps with rent, bills and fuel bills, particularly,” he said. “People are struggling to make ends meet.”
Fisher said some of the lowest paid staff at the station who are seeking financial support are members of the Make Ready team, the support staff who clean and restock ambulance vehicles.
“Until very recently, because they came across from a private provider, they were on £7.10 an hour,” Fisher explained. That’s lower than the London living wage of £11.95 per hour and £9.50 per hour for the national living wage. Fisher added that many of the support staff had voted not to strike with their paramedic colleagues earlier in February.
“I have a certain sympathy because of the low pay they are on. They’re people that are probably struggling more than anyone out of my colleagues to pay their bills so it’s hard to condemn them,” Fisher said.
Protestors fired up
It’s not just unionized workers who’ve taken to the streets. A number of grassroots protest movements have been set up since the energy crisis began to campaign against high energy bills and not enough government support.
Don’t Pay UK, a grassroots organization set up last summer, asked 1 million people to sign a pledge not to pay gas and electric bills and cancel their direct debit payments to their energy suppliers in protest of OFGEM’s planned 80% price cap increase in October. Supporters told MarketWatch that the movement aimed to help people who cannot pay their bills, not people who just don’t want to pay.
The movement never got its 1 million pledges, but supporters ceremoniously burned energy bill letters at Don’t Pay protests held across the country. More recently, the organization teamed up with other grassroots campaigns against soaring energy bills, performing “warm up” protests all around the country.
Many activists in the U.K. have been urging the government, together with gas and electric suppliers, to do more about the amount of money vulnerable populations in Britain are paying to heat their homes. They point to the increased cost of living for disabled people. The Office for National Statistics found 55% of disabled adults found it very or somewhat difficult to afford energy bills in 2022, compared with 40% of non-disabled adults.
“We’re seeing disabled people now making the horrendous choice of having to ration energy, because they can’t afford to switch it on to charge mobility scooters or power wheelchairs,” said disability activist Paula Peters, who works for an organization called disabled people against cuts.
“Many disabled people are high energy users, because they use assistive technology, medical equipment, ventilators, dialysis machines, and need fridges to keep insulin cool,” she told MarketWatch.
The dangers vulnerable people face are serious. In January, a court inquest in North West England heard of the death of 87-year-old Barbara Bolton. She died at the start of the year after developing hypothermia from not being able to afford to put her heating on, reports indicate.
‘You struggle going to work and then go home to struggle to pay for the gas’
To ease the strain of the European energy crisis, former Prime Minister Liz Truss pushed through a £37 billion support package last year, including an energy price guarantee which meant average annual household gas and electric bills would not exceed £2,500. From April 1, this annual price limit will rise to £3,000.
One-off cost-of-living payments will still exist for the vulnerable on welfare support, pensioners and the disabled, but the government is looking to eventually taper and end the support for most Britons by spring 2024.
Plus, the U.K. government also increased its 25% windfall tax levy on oil and gas companies to 35% at the beginning of 2023, lasting until March 2028. Pooled together with the 45% tax on electricity generators, the tax is expected to generate £14 billion this year.
Some energy suppliers have signed up to a Demand Flexibility Service plan developed by the National Grid utilities company, which notifies customers to use less energy at peak times and awards them a bonus. The program aims to reduce energy demand at peak times, which puts less pressure on energy infrastructure and lessens the likelihood of power cuts while saving users’ money.
Read: The hangover: Energy crisis has left Britain’s pubs feeling hammered
Still, these efforts are not enough for many people who are struggling. Jasmine Lota, who works at the British Museum in central London, spent last week on strike and is seeking a pay rise in line with inflation. The Public and Commercial Services union had recently rejected a 4% pay rise offer on behalf of the museum workers and decided to strike while London’s schools were on break for maximum impact.
The cost of living is crippling workers at the museum, who say they can’t work remotely so they have to pay to travel into work – yet another cost which is rising. Humza Asif, a fellow union representative, told MarketWatch that some colleagues even move closer to the British museum to save on transport costs, but end up paying expensive central London rents.
Both Lota and Asif are boomerang kids – adults who’ve moved back home with their parents because they can’t afford a place to rent. Rising energy bills have put having their own apartment further out of reach and been burdensome on both of their households.
“I hardly have any money left at the end of the month,” said Lota. “It’s really stressful.”
Lota and Asif said they’ve had to cut down on all their expenses, and combined with not being able to save money for future plans, it’s impacting their mental health.
“You struggle going to work and then go home to struggle to pay for the gas and electricity,” Asif said. “Often, that just leads to quite a grim lifestyle.”
