Cost of living – live: Borrowing money to pay energy bills could ‘spark housing crisis’

With an energy price cap rising to £3,500 or more, the Money Saving Expert founder said the “zombie government” must “urgently intervene” to help households with support packages.

Speaking to BBC Radio 4, he said MPs must not wait until the end of the Tory leadership contest to take action.

He dismissed the extra help promised by Rishi Sunak and Liz Truss during their leadership bids as “trivial” in the face of bills which are set to be £2,300 a year higher than they were last October.

More than half of British households face living in fuel poverty as annual energy bills are set to increase by more than £2,500.

Socio-economic and class writer, Taj Ali, tweeted a thread on how British Gas’ Centrica’s five-fold increase in profits compares to the situation hanging over millions of UK households who are struggling with the cost of living crisis.

“Fuel poverty is where a household is living in a property with an energy efficiency rating of band D or below in a home that cannot be kept warm at reasonable cost without bringing their residual income below the poverty threshold,” he wrote, adding there is a “clear link” between fuel poverty and health issues.

B oris Johnson took a thinly veiled swipe at his former chancellor Rishi Sunak for announcing he would cut VAT on energy bills.

The prime minister told the Commonwealth Business Forum in Birmingham: “We come now to the next stage in the great relay race of politics.

“I didn’t think it was meant to be a relay race, by the way, when I started.

“I can assure you that the baton is going to be passed seamlessly and invisibly to the hand of somebody else.”

He added: “I’ll give you this assurance, they will continue with the same programme, cutting taxes, simplifying regulation as much as possible, taking advantage of all our new regulatory freedoms, getting rid of every encumbrance from solvency to MiFID to VAT on fuel - turns out to be easier than we thought.”

Boris Johnson has said the cost-of-living crisis is an “inevitable” period of difficulty that the country has to “get through”.

Speaking at the Commonwealth Business Forum in Birmingham, the outgoing Prime Minister said: “I know that the pressures people are facing on their cost of living and the global inflation problems that we’re seeing, the energy squeeze, the cost of gas, every country around the world is feeling it.

“But my argument to you would be that sometimes you’ve got to go through periods of difficulty and you’ve got to remember that they are just inevitable.

“Every athlete - to pick a metaphor entirely at random - every athlete knows that you have to go through times of real strain and real sacrifice when you sometimes feel it’s not worth it if you’re going to be ready to win.

“And by the same token we in this country have to get through these difficult times, but we have to keep investing and getting ready.

“And that’s why I’m proud that this Government is engaged in the biggest ever programme - nothing like it since Victorian times - of infrastructure investment”.

The news of oil and gas companies hitting record profits this morning has been meet with fury as ordinary households are being crippled by energy prices.

Reacting for Friends of the Earth, energy campaigner Sana Yusuf, said: “Clearly not everyone is struggling with the energy crisis.

“These bumper profits will be greeted with disbelief by the millions of people across the UK who are faced with rocketing energy prices.

“The government must impose a tougher windfall tax on energy firms. The bulk of these profits should be used to insulate our homes and help cash-strapped households pay for their heating this winter, rather than developing more fossil fuel projects that roast the planet.”

Around four in 10 women say they are struggling financially, as are three in 10 men, according to “alarming” survey findings.

Some 41 per cent of women surveyed for pensions and retirement specialist LV=’s Wealth and Wellbeing Monitor in late June said they are struggling financially, with 30 per cent of men saying the same.

Overall, more than a third of those questioned said they are struggling financially, which was the highest proportion in LV=’s quarterly survey of 4,000 people across the UK since September 2020.

Some 38 per cent said they are worried about money - a proportion which has increased every quarter over the past year - LV= said.

Martin Lewis has warned of the devastating impact of increasingly high energy bills on people’s mental and physical health.

The Money Saving Expert founder tweeted this morning: “The situation is hysterical. There are huge mental and physical health risks to millions from unaffordable energy and food price rises.”

It comes after Mr Lewis warned the government to take imminent action to help struggling households cope with the energy price caps that will see bills surge £2,500 a year higher than October last year.

Shell CEO Ben van Beurden has said, “We cannot perform miracles,” in response to how to lower retail oil and gas prices.

Energy and commodities columnist at Bloomberg, Javier Blas, tweeted the CEO’s comment shortly after the oil giant’s record earnings were announced.

The oil giant reported eprofits of $11.5bn, doubling its earnings in a single year.

Staff at the Co-operative Bank are to receive a £1,000 pay rise to support them amid the cost of living crisis in the latest move to help cash-strapped workers.

The group said around 95 per cent of its employees will be eligible for the pay rise, which will take effect in September, with only those on the highest salaries not set to benefit.

It comes after the bank already made a one-off cash payment to lower paid staff earlier this year to help them cope with soaring energy, food and fuel bills.

Firms across the banking industry - and the wider corporate sector - have been handing out cost-of-living payments and salary increases to help struggling workers, including Lloyds Banking Group, Barclays and TSB.

Details of the pay rise were unveiled in the lender’s half-year results showing pre-tax profits rebounded to £61.9 million from £21.4 million a year earlier, helped by higher interest rates boosting its profit margins.

The group said the performance was better-than-expected and it upped its full-year guidance for the net interest margin - a key measure for retail lenders.

Britain’s electricity supply might be tight at times this winter, the body that is tasked with balancing the grid has said.

The Electricity System Operator (ESO) forecast that margins might narrow significantly towards the very end of the year, but it believes it should be able to keep the lights on.

“Our operational modelling indicates that there could be some tight periods this winter, which are most likely to occur in the first half of December,” it said in a report issued ahead of winter.

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