Energy companies hid behind hedges to keep prices high. Now the hedges have gone, what's their excuse?

Regulators in Britain, including OFGEM (energy companies) and the FCA (financial companies), are powerless to stop many rip-offs because Parliament has made them that way. 
Regulators have about as much right to stop bad behaviour as a cop has to pull you over for doing 29 mph in a 30 mph zone. You'd need to be shooting at pedestrians with one hand, leaving just your other hand on the steering wheel, for them to do that. Even then, if a British regulator was prosecuting, you wouldn't be done for the civilian casualties but would get a £100 fine for driving while distracted (by shooting at people) as if you were using a mobile phone.

Regulators are impotent because consumer law passed and maintained by successive parliaments, Conservative and Con-Dem and Labour, make it quite legal for traders to rip off the 'less than average' 50% of their customers. This premise forms the bedrock of British commercial culture from banks to pensions to mobile phones to estate agents to broadband packages. The Office of Fair Trading (OFT) even provides a helpful roadmap to guide crooked traders on reaching the below average consumers (our annotations are in red (and this chart really is an OFT roadmap, not us being satirical)):



Energy companies, for example, have traditionally hidden behind hedges to carry out their mischief. These are not the leafy hedges prized by small children with catapults. The hedges the energy companies lurk behind are financial. So what are these financial hedges about?

There are legitimate reasons to take shelter behind a financial hedge. For example, the average refrigerator contains 123 pounds of steel. When a fridge manufacturer publishes a catalogue of prices for the next year, it wants to be sure the cost of the steel it uses doesn't shoot up leaving it making losses on the fridges it sells (or having to randomly hike their prices). The fridge maker can hedge this risk by contracting to buy all the steel up front, but only to be delivered and paid for at various times in the future during the year (a "futures contract"). The steel can be delivered to the fridge factory monthly, just in time for it to be fashioned into that month's quota of fridges.

As a result of the hedging the fridge manufacturer won't suffer if the actual price of steel goes up, but neither will it benefit if the actual price of the steel goes down. It will just pay the price it agreed when it signed up to the futures contract hedge.

Energy companies, who generate and sell electricity and gas to households and industry, can also 'hedge' their purchases of the fuels they use: oil; gas; coal; uranium.

In January 2016 David Cameron complained again about energy companies, scolding them for not cutting their household bills at a time oil prices had plummeted. 18 months before Cameron's passing winge, in June 2014 Mr. Dermot Nolan, CEO of OFGEM, wrote a “letter calling on large energy suppliers to explain the impact of falling wholesale prices on customer bills.”


This resulted in a series of "Dear Dermot" letters. The Big Six consensus being that due to hedging it would be at least 18 months before wholesale prices would have any impact on retail energy bills to households and businesses. Scottish Power stated in its letter:

"Dear Dermot,....
we buy our fuel ahead in order to avoid price shocks from instability in the wholesale markets. This means that movements in wholesale spot markets up or down, are not immediately passed into our cost base: the majority of our energy for 2014 was bought before the start of the year. Unfortunately, the energy we are mainly buying now – for delivery in 2015 and later – is not falling much in price.”


The energy companies thought the drop in oil prices would be temporary. They thought oil prices would surely be back up well within 18 months. In its own Dear Dermot letter, NPower said:
 
"Dear Dermot...
The primary reason for the fall in [wholesale] prices is the exceptionally mild winter we have had" [i.e. the winter of 2013-14].

Low prices caused by the exceptionally mild winter in 2013-14? They never for a moment thought the price would still be low 18 months later, blowing away their 18 month deep smokescreen and ripping off all the 18 veils they were prancing behind.

To better understand what they were talking about, take a look at the graph below of the price of a futures contract to deliver crude oil in January 2016. The price of a barrel of oil delivered to your power station in January 2016 depended on when you bought your futures contract:

• If you bought the futures contract in 2013 it would have cost around US$95.  
• If you bought the same contract in mid 2014 it would have cost about US$100. 
• From mid 2014 the price crashed. 
• In January 2015 the price was down to US$60. 
• By the middle of 2015 this futures contract for delivery of oil in January 2016 was down to US$50. For the remainder of 2015 the price continued to fall towards US$40.

https://www.quandl.com/data/ICE/BF2016-Brent-Crude-Futures-January-2016-BF2016

The next graph shows the price of futures contracts for delivery of oil in July 2017.

https://www.quandl.com/data/ICE/BN2017-Brent-Crude-Futures-July-2017-BN2017

With prices so low, the energy companies should be filling their boots with oil futures for as far into the future as possible. They should be promising households and employers much lower energy bills for at least 18 months. Sadly, past experience shows when oil prices go up households and employers will pay more pretty quickly.

Oil prices will go back up. The price can be moved on the whim of a small group of men in countries round the World not subject to shareholders nor democracy nor supply nor demand. Just as energy companies claim to have been stuck with high prices for 18 months after prices crashed, they should also be stuck with low prices for 18 months after the oil price rebounds.

Will our household energy bills stay low for that 18 months? OFGEM did once try to expose the energy companies' shenanigans by publishing wholesale and retail prices. However, they were quickly slapped down, presumably by OFGEM's political masters. The Daily Mail reported in January 2016:
"Power giants have won a secret battle to hide the scale of the profits they are making by refusing to cut prices.

Money Mail can reveal that last April the energy watchdog was bullied into ditching data that show whether households are getting a good deal.

These vital figures used to be published monthly. They showed the difference between what power firms were paying [wholesale] to supply energy to your home and what they were charging you on your bill."

Dear Dermot, OFGEM CEO, responded to the Mail's allegation saying it's not true any secret deal was done. Dermot completely avoided the question of why OFGEM stopped publishing these figures.

History shows that when oil prices go up consumer energy prices go up straight away. But when oil prices go down, even when they collapse, consumer energy prices just trickle down. In February 2016, following the oil price crash 18 months earlier, energy companies reduced prices by a puny 5%.

Whichever way oil goes the energy companies continue business as usual, barely able to stifle their chuckles. They are confident that those who can do something won't, and those who want to do something can't.

Which leaves poor old OFGEM standing impotently by looking to British consumers very much like buffoons.

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OFGEM is extremely relaxed about Wholesale profiteering by the Big Six energy companies.

Pity the poor executives of OFGEM, Tweedledum to the FCA’s Tweedledee. Both OFGEM (Office of Gas and Electricity Markets), regulator of the UK energy market, and the FCA (Financial Conduct Authority), regulator of the UK finance industry, are just actors on Britain’s regulatory stage. And like actors anywhere, they can only read from the script they are given. A script written by lawmakers in Parliament, in a farce directed by Cabinet Ministers. When one actor fails to smile and shout and sob as directed there are plenty of replacements to choose from. Plenty of players eager to pick up a medal or perhaps even a damehood or knighthood for services rendered (or artfully not rendered).

And that's not to mention a generous six figure salary for those who get to the top. OFGEM’s report for 2014-15, showed their CEO taking £215,000 for that year; Martin Wheatley, FCA CEO until being defenestrated in September 2015, was on a basic salary of £460,000.


You will notice the FCA’s boss is paid considerably more than OFGEM’s CEO. Perhaps because the public have a better understanding of financial rip-offs, and thus have more contempt for the FCA’s dopey regulation of the banks. This is of course quite unfair, as OFGEM’s performance is entirely equally dopey. 

If only the public understood the energy market better then OFGEM’s boss would surely get a bumper hike in salary to compensate for the heightened public contempt.

So we thought we would throw a little more light on OFGEM’s lamentable performance. And perhaps its CEO can get a well deserved, if not earned, payrise.

In 2011 OFGEM commissioned the accountancy firm BDO to look into the issue of energy pricing transparency. BDO made 8 recommendations, of which OFGEM ditched 6 and watered down the remaining 2. Perhaps BDO got the wrong end of the stick, thinking OFGEM wanted them to recommend how to INCREASE transparency!

Silly them. In practice, OFGEM seems to find lack of transparency quite agreeable. The graph below is from an OFGEM infographic titled "Bills Prices and Profits". It is an example of how OFGEM strives to smokescreen energy company profits. The graph shows only a meagre slice of profit (EBIT) at the top of each column, illustrating how hard OFGEM fights to keep prices down:

The reality is the Big Six energy companies operate in both the Wholesale market (generating) and the Retail market (selling to end users, like you and me and the companies we work for). They are all making profit from the "Wholesale costs" shown in the OFGEM graph above. However OFGEM fails to show this.

OFGEM's "Wholesale Energy Markets in 2015" report shows all the Big Six generate a significant portion of the electricity they sell on the Retail market. EDF actually generates more than it sells.

So OFGEM provides the helpful graph to show Retail profits. But fails to provide the equivalent to show what the Wholesale profits of the Big Six are.

An analysis was done by Derek Louden, an energy industry commentator, which may explain why. According to Louden's calculations, the generators are generating very healthy profits indeed.

OFGEM themselves gave the game away in a report way back in 2010, "Electricity and Gas Supply Market Report, Ref:23/10". Their graph shows how from 2005 the energy companies suddenly switched their profits from their Retail to their Wholesale businesses. Explaining why they and OFGEM now seem to focus on the teensie retail profit, while ignoring the fat wholesale profit. (As far as we can tell, OFGEM haven't been so forthcoming since this 2010 report - please let us know if we are mistaken).


In 2015 the Competition and Markets Authority (CMA) published its "Energy Market Investigation, Notice of possible remedies". In this report the CMA identified a "Lack of robustness and transparency in regulatory decision-making", specifying "The lack of a regulatory requirement for clear and relevant financial reporting concerning generation and retail profitability."


Non-transparent regulators and non-transparent energy companies confusing the ripped-off British consumer! Ripping us off to the tune of £1.7 billion a year according to the CMA’s “Energy Market Investigation” report of July 2015:
“This equates to customers paying approximately £1.7 billion per year more than they would have done had prices and costs been at benchmark levels, or £8.5 billion over the five-year period.”

If the loss of money was not enough, even the loss of life was insufficient for something to be done. The Hills Report on fuel poverty, commissioned by the Department of Energy and Climate Change in March 2012, stated:
"From a health and well-being perspective: living at low temperatures as a result of fuel poverty is likely to be a significant contributor not just to the excess winter deaths that occur each year (a total of 27,000 each year over the last decade in England and Wales), but to a much larger number of incidents of ill-health and demands on the National Health Service and a wider range of problems of social isolation and poor outcomes for young people."
Final report of the Fuel Poverty Review, Professor John Hills


So unaffordable energy was a significant contributor to the 27,000 excess winter deaths over the decade to 2012? Having seen junior traders from miscreant banks led off to prison while their directors are left to buy each other drinks in their clubs, we think junior energy company executives would be prudent to keep evidence for when the corporate manslaughter charges are brought in a decade or two.

Neither the Labour nor Tory governments, nor the LibDems in coalition, did anything much about the energy market. David Cameron promised, in Prime Minister's Questions on 17th October 2012:
“I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers—something that Labour did not do in 13 years, even though the Leader of the Labour party [at the time, Ed Miliband] could have done it because he had the job.”

Miliband didn’t do it. Cameron didn't do it either. 

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Graphs at a glance: Will fracking bring cheap energy to Britain? The evidence suggest not.

There has been a lot of talk about fracking the UK. Our government is so keen it has considered changing the law on trespass to make it easier for companies to frack under our properties. 

Would it be a good thing? Even if there is absolutely no risk bits of our green and pleasant land  may disappear down multiple sinkholes?


The graph below from a parliamentary report, "The Impact of Shale Gas on Energy Markets", shows how fracking caused the price of gas to plummet in the USA. Benchmark natural gas prices in the USA (Henry Hub) and the UK (National Base Point (NBP)) were about the same until the Americans got down to some serious fracking.

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OFGEM to investigate British Gas for paying salesmen bonuses for inflating business customers’ bills

Including the Royal British Legion! KJ learns more from his mate, a British Gas salesman...

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Regulation in Britain: Compare and contrast regulation of Citizens and of Companies. Company executives pay piffling fines, ordinary citizens do jail time.

In May 2014 the energy regulator OFGEM boasted about its latest ‘record fine’: £12 million inflicted on E.on. OFGEM’s press release stated:

• E.ON’s large scale mis-selling results in biggest supplier payout to consumers 

• Ofgem found management arrangements were insufficient to protect against mis-selling

OFGEM has the power to fine upto 10% of revenue. E.ON’s UK revenue in 2013 was £9.9 billion. The £12million fine, about 0.1% of revenue, is not even a drop in that ocean of cash.

Money is the one thing that is not in short supply for Energy companies. They are awash with it. Fraudulent behaviour by our Energy and Financial sectors have been ‘punished’ by taking from them that which they have most of: money taken from their customers. Like fining Billy Bunter a doughnut – he may not like it, but he has plenty more. The loss of a doughnut will not reform him.

Fraud is directed by people, not companies. Directors don’t fear fines – after all it is almost inevitably the company that pays them. But while they have more than enough money to brush off fines, they have about the same amount of time as anyone else. A year in jail is a year in jail, whoever you are.

The Sentencing Council, appointed by the Lord Chief Justice and the Lord Chancellor of the UK, provides guidance to the British Justice System. Here is the guidance when it comes to frauds by ordinary citizens:

• "Confidence Fraud" (not unlike doorstep selling by energy companies) for sums of £500,000 or more: 5-8 years custody 

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Graphs at a glance: Financial regulation in the USA and the UK: Federal Marshal versus Sleeping Policeman

Winston Churchill said of America:

“You can always rely on America to do the right thing once it has exhausted all the alternatives”

Sadly, the same can’t be said of Britain.

London and New York have fought for the top “Global Financial Centre” spot for years. According to the March 2014 “Global Financial Centres Index” produced by Z/yen, who describe themselves as “the City of London’s leading commercial thinktank”:

“New York is now the leading centre, although its lead over London is statistically insignificant – two points on a scale of 1,000.”

What is it about crusty old London that keeps it head-to-head with glitzy New York? According to a puff-piece by the City of London Corporation the key elements to a Global Financial Centre are:

• Critical Mass; Connectivity; People; Regulation; Domestic Market Infrastructure; Business Environment

Six solid gold attributes that New York and London can both offer. But London offers something even more valuable! In March 2014 the Financial Times reported that the total fines paid since the Banking Crash by banks to US regulators hit the US$100 billion mark:

"Wall Street banks and their foreign rivals have paid out $100bn in US legal settlements since the financial crisis, according to Financial Times research, with more than half of the penalties extracted in the past year."

Figures show that in 2008 both UK and US regulators were fining banks a similar amount - reflecting the fact that the US regulation was then just as spineless as the UK. But by 2013 UK regulatory fines were only one fiftieth US fines.

Exchange rate US$1.6 = £1

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Operating a profiteering cartel is a criminal offence. So if 6,000 die from fuel poverty each year, will manslaughter charges be next?

Fee, KJ and Chris wonder what will happen next to the "Big 6" energy firms...

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Graphs at a glance: Wholesale energy price data from OFGEM and NPower show the key excuse for energy price hikes has been a fib

The Financial Conduct Authority (FCA, previously the FSA) and OFGEM are the pantomime twins of regulation in Britain: Tweedle-dumb and Tweedle-dumber. 

The FCA waving its Vorple Sword is regarded by the banks as no more threatening than a cheer-leader wielding a furry pom-pom. The litany of bankers' interest rate rigging; pension annuity scams; insurance scams etc. goes on with no sign of any banker swapping his pure wool pinstripe suit for an acrylic stripey prison jersey.

At least the FCA can claim it is getting tricked by different scams all the time. OFGEM, evidently the dumber of the twins (it must be truly mortifying to be dumber than the FCA!), has managed to be deceived for years by one central fib: the soaring wholesale price of energy. 

For years energy companies have blamed consumer price hikes on World energy markets. Data published by OFGEM in October 2013 (why did it take them so long to do something so obvious?), and by NPower in January 2014 (why did they do it at all?) show wholesale prices simply have not been shooting up.

Combining this data from OFGEM and NPower, and retail prices from Consumer Futures reveal:
 
a) Using NPower's figures (in real terms) since 2007, customer bills have increased by 18% in 2013, and predict a 40% increase by 2020, while wholesale costs have actually fallen. In this NPower report instead of blaming wholesale prices NPower blames everything else except profits:

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Are we being overcharged by up to £4bn? OFGEM, the energy regulator, says they have no idea

But Chris, KJ and Fee think they do...

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Excuses for being completely useless - Regulators (OFGEM; FCA/FSA; OFTEL et al), here are some good excuses for not doing your homework

In January 2014 the Labour Party issued another report, “Powering Britain: One Nation Labour’s plans to reset the energy market”. The report made various assertions relating to the period after 2010, conveniently overlooking Labour’s own lamentable record regulating the energy industry. It is quite extraordinary how much politicians care for us when out of power, and how little when in power. Wasn’t it Spiderman who said “With no responsibility comes great power”. Power to talk without having responsibility to deliver. Anyway, the report stated:

"Since 2010, household energy bills have gone up by over £300 a year whilst small businesses are paying over £13,000 a year more

Lack of competition in the retail market has resulted in consumers paying £3.6 billion more than they need to"

The report includes graphs showing how energy companies’ blaming wholesale cost (what the energy companies pay) for retail price (what you pay) rises since 2011 are phoney. Average annual increases between 2011 and 2013 have been:

• Electricity: wholesale up 0.5% per year; retail up 9.7% a year
• Gas: wholesale up 1.59% per year; retail up 11% per year

OFGEM, the energy regulator, denies that consumers are being ripped off though OFGEM accepts the need to “break the stranglehold of the big 6 in the retail market” (so we're not being ripped off, just strangled?) and has repeatedly blamed energy companies for not being "transparent" (i.e. telling the simple truth) about their wholesale costs.

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Graphs at a glance: Cambridge University study shows fewer than 1 in 10 members of the public trust or regard as ethical banks and energy companies

The relationship between British Industry and British Government is the same as that between a dominatrix and her clients. Plenty of shouting and threatening, but no visible marks. 

Ministers appear in the news shooting out their lips, shaking their heads, scolding, threatening terrible consequences and spankings, but making no visible changes.

If you want to see a pair of reddened cheeks you need go no further than certain parliamentary committee rooms:

"I think you do evil" intoned Margaret Hodge, Chair of the Public Accounts Committee, who was being strict to the boss of Google, accused of tax dodging.

“I apologise to the Secretary of State and I should apologise to this committee and the taxpayer on behalf of our company. We didn’t have the systems in place that we needed” grovelled the boss of G4S having been caught out overcharging for offender tagging services. 

Margaret Hodge is matched by Andrew Tyrie, the man of the gimlet gaze who chairs the Treasury Committee. Peers of the Realm have been called liars by other peers of the Realm. Lord Lawson, sitting on the committee, chastised Lord Stephenson, former chairman of the wrecked bank HBOS, with the words "Either when you said that you were being dishonest, or else, if you believed it to be correct, you were delusional. I prefer to believe that you were not dishonest, and you were simply delusional."

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Over 5,000 elderly and sick will die this winter because they can’t afford to heat their homes

KJ has a beer with a pal...

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Graphs at a glance: OFGEM finally does something useful by publishing wholesale energy prices! See energy companies' bogus reason for hiking prices exposed!

This is no laughing matter, so lets skip the levity. OFGEM, one of the few organisations in Britain that manages to make the FCA (formerly the FSA) not look uniquely cowardly and incompetent, has published some useful data! 

Is it OFGEM's Wikileaks moment? Is it a fat-finger accident? Or did they actually mean to publish this useful information?

We like to think the best of everybody (we really do!) so lets assume they did this intentionally.


Anyway, for the first time OFGEM is explicitly publishing wholesale energy cost data. The data explicitly and independently shows the energy companies have been telling porkies about the rise in open market wholesale prices in recent years.

OFGEM data for the period September 2011 to October 2013 shows that since September 2011

• Wholesale electricity price has gone up by just over 2%. NPower and British Gas have raised prices by nearly 30%
• Wholesale gas price has gone up by 8%. NPower and British Gas have raised prices by upto 35%.

To add insult to penury, because the wholesale cost makes up half the bill the mathematics says the percentage increase in bills should be half the percentage increase in wholesale cost.  i.e. over the last 2 years wholesale costs would justify an extra 1% for electricity and 4% for gas.

As the director of OVO, one of those teensy independent energy companies, said about the Big Six in a BBC interview in October 2013:

"If they're buying more expensive gas, more expensive electricity, in a large part we think this is because they're selling it to themselves".

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Thinking of switching energy supplier? Out of the frying pan...

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Graphs at a glance: Energy companies' price hike tactics make switching futile

The government's answer to gouging energy companies is to switch. In David Cameron's words:

“There is something everyone can do, which is look to switch their electricity or gas bill from one supplier to another.”

Cameron, washing his hands of the matter, says you're on your own - run for it! He would have us jump from one frying pan into another frying pan! 

Information on price rises from the Consumer Futures website reveals the futility of switching. The cheapest electricity provider is hardly ever also the cheapest gas provider. And while British Gas has offered the least shocking deal on electricity most of the time in recent years their suffocating gas tariff will have given you a right roasting overall. Taking gas and electricity prices separately there is a hundred or so pounds difference a year between lowest and highest. But taking both together the Big Six march a very disciplined pricing goosestep. Whoever you are with you will get a kicking.

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Graphs at a glance: how electricity and gas bill promises from Miliband and Cameron are just yet more hot air and flatulence

Did Ed Miliband, speaking at the 2013 Labour Party Conference, actually believe his promise to freeze the price of electricity and gas would help anybody other than himself and his electoral (and leadership) prospects? 

Any more than David Cameron believed in his own unequivocal promise to stop energy companies ripping off Britons by making it law that we should be paying the lowest tariffs? A promise Cameron made so clearly, so concisely, so undeniably that we reproduce his words directly from Hansard (Parliament’s minutes):

“I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers—something that Labour did not do in 13 years, even though the Leader of the Labour party could have done it because he had the job.”

David Cameron during Prime Minister’s Questions on 17^th October 2012 shortly before lunch (thus presumed sober).

Cameron never did legislate as he had so clearly promised. And with Miliband giving the energy companies over a year's notice to pump up the price in preparation for any price freeze, he won't either. After all, Miliband didn't promise to lower the price, just to freeze it.

By focusing on the retail price of energy both men succeed in missing the real point: it's the wholesale price, stupid. The CEO of SSE, one of the 'big six' energy companies, bleated in his blog:

"we showed a profit margin of just 1.5 per cent from supplying energy. That’s lower than many other essential services, like supermarkets or mobile phones, for example."

And he is right! Retail energy companies say their profit margins are so low because they have to pay a high price for the energy they buy wholesale to sell to us retail. They scuttle over the fact that the gouging wholesalers they complain about are in fact themselves. The companies that provide the wholesale electricity and gas are the retailers’ own conjoined twins. Each of the ‘big six’ are now able to supply virtually all their own needs. 

Energy companies can pull this scam off because they are permitted to be 'vertically integrated' - i.e. they own both the wholesale and the retail businesses. The graph below, from an OFGEM report, shows how from 2005 energy companies shifted the profits from the Retail to the Wholesale end of their businesses, by putting up the wholesale price they make them pay to themselves. This allows them to claim their profit margins are puny when selling to their customers.

The Parliamentary Committee on Energy & Climate Change reported in July 2013 that while energy companies could claim a measly 1.5% profit margin on supplying domestic electricity, this was covering up a more than 20% profit margin taken by the wholesale generating end of these same companies.

Profit margins	2011 aggregate margin	2010 aggregate margin	2009 aggregate margin
All segments	7.6%	7.2%	5.8%
Generation	24.4%	21.9%	22.5%
Supply	3.1%	3.8%	1.8%
Electricity - Domestic	1.5%	0.3%	2.1%
Electricity - non-Domestic	3.3%	4.7%	4.0%
Gas - Domestic	4.3%	5.7%	-0.4%
Gas - non-domestic	6.5%	6.2%	-0.5%

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Both socialists and neo-liberals should ally to stop the "Big Six" energy firms' rip-off

Fee and Chris explain it all to KJ...

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Graphs at a glance: households in fuel poverty tripled in a decade

From a report by the Parliamentary Select Committee on Energy and Climate Change:

"Rising energy costs are the major factor in the upward trend in fuel poverty; the table below shows the movement in domestic gas and electricity prices since the low point of the early 2000s. The most recent official statistics indicate that 3.5 million households in England were fuel poor in 2010 and the Government has estimated that 3.9 million households were in fuel poverty in 2012."

 

It will not have escaped your notice that the steepest rise was during the previous Labour governments. Something the Tory-LibDem coalition has failed to reverse.

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Graphs at a glance: mortality rises by 19% in England's winter. One in five of these excess deaths are caused by cold homes.

UPDATE NOV 2016: In 2012 so-called “avoidable” winter deaths were at 24,000. Since then the death rate has almost doubled. According to the latest ONS figures, almost 44,000 “excess” deaths were recorded for the winter of 2014/15. This was the highest number recorded since 1999, with 27% more people dying in the winter months compared with the non-winter months. The majority of deaths (36,300) occurred among people aged 75 and over, with cold weather and underlying health conditions cited as key causes. Virulent strains of winter flu, along with housing conditions and energy bills, are also thought to be contributing factors.



From a report by the Parliamentary Select Committee on Energy and Climate Change, here is an extract of evidence provided to the Select Committee by the National Pensioners Convention:
 

"Every year, mortality rises by 19% in the winter months in England. This amounts to an average of 27,000 “excess” winter deaths (EWDs); 90.8% of which last year were in the over 65 age group.

The majority of these deaths occur among older people, especially women, and those with underlying health problems. However, they are not people who would have otherwise died at that time. Most deaths are due to cardiac disease, strokes and respiratory problems, not hypothermia.

The Marmot Review Team also found there was a greater risk of death in colder housing than in the warmest housing, estimating that 21.5% of all excess winter deaths could be attributed to cold homes.

Excess Winter Deaths

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