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Energy price cap rises ‘of over £500 more’ deepen fears over government’s “abysmal” strategy

‘Abysmal’ government decisions causing ‘unimaginable stress to millions’ as soaring bills loom

Harry Cockburn
Environment Correspondent
Tuesday 12 April 2022 14:07 EDT
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’It is now untenable for the government not to act at speed to protect the most vulnerable,’ said think tank Green Alliance (Yui Mok/PA)
’It is now untenable for the government not to act at speed to protect the most vulnerable,’ said think tank Green Alliance (Yui Mok/PA) (PA Wire)

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Gas and electricity bills could rise by another £500 a year and compound the UK’s spiralling cost of living crisis, it has been warned.

Bills have already risen by up to 54 per cent this month, ​​resulting in an average increase of £693 a year.

Ofgem, the energy watchdog, has reportedly estimated that the energy price cap could rise to around £2,400 in October, although the Government insists such figures are ‘ highly speculative’.

This time last year the maximum average annual amount energy firms could charge stood at £1,042, but wholesale energy price rises, followed by the war in Ukraine driving greater uncertainty over supplies saw the figure rise to £1,277 in October, before leaping to £1,971 this month.

There are concerns the bills could rise even higher than the additional £500 rise that Ofgem is said to have warned ministers about, according to The Times.

Chancellor Rishi Sunak has set out a £200 "rebate" in the form of a loan to help people who are struggling to pay bills, but MPs and campaigners have said he must do much more to protect vulnerable people.

Rishi Sunak has been criticised for not doing enough to tackle soaring bills
Rishi Sunak has been criticised for not doing enough to tackle soaring bills (AFP via Getty Images)

The government’s energy security strategy has also been criticised as failing to address the immediate price rises, instead focusing on distant fossil fuel and nuclear projects instead of efficiency improvements and insulation which could rapidly help households reduce bills.

Dr Silvia Galandini, Oxfam’s domestic poverty lead, told The Independent that "risky" sources of fossil fuel energy "cannot be the answer".

She said: “The energy price cap rise will hit the poorest families hardest. Those who are already struggling to make ends meet will be looking to the Chancellor for urgent support. At a minimum, the UK Government should increase benefits in line with the predicted inflation rate of 7.7 per cent. The latest rise of just 3.1 per cent means many people face a real-terms loss in income.

“With the cost of living soaring, more must be done to support the most vulnerable people, including many who are unable to work due to sickness, disability or caring responsibilities. There will be those who would say the answer is to pursue ever more risky sources of fossil fuel energy. But this cannot be the solution. Strengthening the social security system so it adequately protects people from harm would be an essential first step.”

The Green Party’s co-leader Adrian Ramsay described the government’s energy strategy as "abysmal", with further rises to bills causing "unimaginable stress" for millions of people."

The government "is doing next to nothing to help", he told The Independent.

Green Party co-leader Adrian Ramsay (R) branded the Governments energy plan ‘abysmal’
Green Party co-leader Adrian Ramsay (R) branded the Governments energy plan ‘abysmal’ (PA)

“To allow people to continue to suffer like this is a political choice,” Mr Ramsay said. “We could have had warm homes, cheap bills and a safer climate if successive governments had chosen to act decades ago. But we could still be making the big changes required right here today.

“Unfortunately, as we saw with the abysmal energy security strategy published last week, the government is still not doing what is required. While people are bearing the brunt of spiralling energy costs, oil and gas companies are raking in unprecedented profits. We need an immediate tax on those companies’ dirty profits to raise money to provide immediate financial support."

He added: "We need an immediate plan to insulate every home in the country that needs it and ramp up renewable energy provision, so that we are no longer reliant on oil and gas.”

Lisa Nandy rebukes Rishi Sunak's 'shocking' help for families over cost of living crisis

With the Chancellor’s Spring Statement already having received harsh criticism from opposition MPs and climate and environment campaigners, hopes are now pegged on the government recognising the need to take stronger action at the next opportunity.

Roz Bulleid, deputy policy director at Green Alliance told The Independent: “With households already struggling to make ends meet, it is now untenable for the government not to act at speed to protect the most vulnerable.

“All eyes will be on the autumn budget, but that will be too late to get new measures off the ground. The government missed the opportunity to insulate homes and build out the cheapest forms of clean energy in its energy strategy, but could still take emergency measures along these lines."

She added: “In the meantime, government is profiting from higher revenues and resisting the opportunity for a windfall tax on the extraordinary profits of oil and gas companies that could fund further support for consumers.”

Speaking about the reported price rises forecast for later in the year, an energy department spokesperson told The Independent: “We do not recognise these grossly exaggerated figures. Any prediction of the price cap level, which is set by Ofgem and not the government, is highly speculative.

“We recognise the pressures people are facing with the cost of living, which is why we have set out a £22bn package of support and the energy price cap continues to insulate millions of consumers across the UK from high global gas prices.”

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