Labor calls for emergency budget as energy cap set at £3,500 | Energy bills
The energy regulator is expected to approve a record rise in household bills on Friday as pressure mounts for an emergency budget to tackle the cost of living crisis.
The industry price cap, which sets the maximum rate suppliers can charge, is set to top £3,500 a year from October for the average dual-fuel fare, an increase of more than £1,500 from april.
Ofgem’s announcement, which Labor says would ‘sow fear’ in hearts across the country, will lend new urgency to calls for the government to step in to extend the £15billion package for combat the rise in household costs announced in May.
Wholesale gasoline prices have risen further since then and hit new records on Thursday, signaling little respite from the relentless rise in energy prices. Experts have predicted average annual bills could top £5,000 from January, with rising electricity prices pushing inflation past 18% next year.
Raw data has shown that Britons have already worried about their bills this summer despite low energy consumption compared to the winter peak. A YouGov poll showed that about 40% of 1,700 adults surveyed had struggled with food and energy bills in the past three months. About three-quarters of those polled said the government was doing too little to help those struggling with the recent rise in the cost of living, including two-thirds of Tory voters.
Shadow Chancellor Rachel Reeves said: ‘The only people resisting measures to help people are the government. We wanted Parliament to be recalled before the [Ofgem] announcement, but that did not happen.
“We want an emergency budget. We want the government to say what it is going to do. This announcement will strike fear into the hearts of families across the country. Urgent action is needed. Everyone came up with action plans except for Liz Truss and Rishi Sunak — the two people who can actually do something about this — who remained silent.
Despite warnings that two-thirds of households, or around 45 million people, will have been fuel poverty in January, the two candidates to replace Boris Johnson as Prime Minister and leader of the Conservative Party have so far refused to set out major new measures to protect the most vulnerable families. Sunak promised to scrap VAT on energy bills and an as-yet-unquantified increase in household aid on benefits, while Liz Truss pledged “all round” aid for businesses and households. Truss and Sunak ruled out an energy price cap freeze. Labor leader Keir Starmer has earmarked £29billion to freeze the funded cap, partly through an £8billion windfall tax on the profits of energy companies.
The outsized profits made by oil and gas companies since Russia invaded Ukraine were highlighted on Thursday when the North Sea’s largest oil and gas producer reported a 12-fold increase in profits. Harbor Energy said half-year profits reached $1.5bn (£1.3bn). Harbor said it would return an additional $200 million to shareholders from windfall revenue. Skyrocketing profits by major oil and gas producers since the war sparked accusations of profiteering and in May led Sunak to introduce a windfall tax.
The Unite union said major energy suppliers, distributors and generators made a combined profit of £15.8billion. Last year. Unite general secretary Sharon Graham claimed that “rampant corporate profit is at the very heart of soaring energy bills”.
The National Energy Action (NEA) energy poverty charity has estimated that raising the cap above £3,000 would reduce the number of UK households in energy poverty from 6.5 million to 8.5 million.
Adam Scorer, chief executive of the NEA, said: “The extent of the damage caused by these price hikes must be taken into account. life.
“Even with a mild winter, millions of people face severe frost. We must act now to avoid the harshest winters. »
Don’t Pay, the campaign group which is trying to organize a mass non-payment of bills this autumn, said Ofgem’s announcement would lead to millions ‘to face a mountain of debt or condemnation to death this weekend.”
Alex, a Levenshulme resident who signed up for the Don’t Pay campaign, said: “We had no choice but to refuse to pay. This rising bill is going to hit people like a sledgehammer, meaning millions will face a mountain of debt or even a death sentence this winter.
“The tragedy of the situation is that it doesn’t have to be – and other countries are showing that these monstrous energy bill hikes are not inevitable.”
In Poland, households can now apply to buy coal, the country’s main source of heat, thanks to a government subsidy, while Spanish citizens have had the prices of gas cartridges fixed until next year. The Italians received a “cost of living bonus” of €200 (£168).
Graham Duxbury, chief executive of the charity Groundwork, which tries to alleviate poverty, said: ‘What we need are simpler and more stable funding models so that we can help those most in need make the most of the help they receive and preserve as much heat as possible this winter, but also help those who are thrust into fuel poverty for the first time to make the practical and behavioral changes needed to minimize their bills.
Environmental activists said the government should step up efforts to improve the energy efficiency of homes in light of the energy crisis. Mike Childs, policy manager for Friends of the Earth, said: ‘A nationwide program of street-by-street home insulation, focused on those who need it most, would reduce energy use, reduce climate pollution and could cut energy bills by £1,000 or more each year.