Cost of living – latest: Water bills to rise as Sunak warns middle earners they’ll ‘feel pinch’ of gas prices

Growing financial pressures mean that 300,000 extra people will need support paying their water bills by 2025, on top of the 1.1 million customers who already require some form of assistance.

Christine McGourty, the head of Water UK, said people would still be paying “little more than £1 a day for water” after a 1.7 per cent rise in water bills was announced.

“But we know this is a difficult time for many, and no one should have to worry about their household essentials,” she added.

“There is a wide range of support available for those in need, and I would urge anyone who’s concerned to get in touch with their water company.”

Families will struggle with higher bills “for many years to come”, the Resolution Foundation has warned.

Mike Brewer, chief economist at the think tank, said the chancellor’s financial support package will not adequately support the poorest households.

“The £350 energy bill rebates will soften the cost of living crunch this spring but families across Britain are still set for recession-era levels of squeezed budgets this year, with the average family seeing their incomes fall by £1,000 over the course of 2022.”

Calls by the governor of the Bank of England for pay restraint have been labelled a “sick joke” by unions.

Responding to Andrew Bailey’s comments, Sharon Graham, Unite general secretary, said: “Why should they be expected to pay for the failures of the energy market and the total shambles of Government policy?

“Workers don’t need lectures from the Governor of the Bank of England on exercising pay restraint. Why is it that every time there is a crisis, rich men ask ordinary people to pay for it?

“We will be demanding that employers who can pay, do pay. Let’s be clear - pay restraint is nothing more than a call for a national pay cut.”

Elsewhere, Gary Smith, GMB general secretary, called the comments a “sick joke”,

“The nerve of Mr Bailey is scarcely credible,” he added.

More union reaction to Andrew Bailey’s remarks is now in...

Kate Bell, head of economics at TUC, said: “Hard work should pay for everyone, but real wages are set to plummet again.

“Calls for pay restraint are ill-founded and will make the squeeze on family budgets even tighter.

“As the Chancellor said yesterday, energy prices are pushing up inflation - not wage demands.

“Britain needs a pay rise, not another decade of lost pay and living standards.”

The poorest households in Britain will soon see the average proportion of their spending on energy bills spike from 7 to 10 per cent, new analysis suggests.

The Resolution Foundation’s finding accounts for the government’s support package, which the think tank warns will not cover everyone.

More than one in ten of the poorest families will not be entitled to a £150 rebate on council tax, as they live in Band E+, it said.

Water charges will rise by 4.2 per cent in Scotland in line with October inflation figures, it has emerged.

This will bring costs up by average of 31p per household.

Despite the increase, water bills in Scotland will still be lower than in England and Wales, said Scottish net zero secretary Michael Matheson.

He added: “In developing the charging principles for the industry for 2021-27, ministers took the decision to increase the levels of support for those vulnerable customers who have the most difficulty paying.

“The water charges reduction scheme discount has increased from 25 per to 35 per cent - protecting thousands of eligible households from higher charges.

“Households in receipt of the full water charges reduction scheme discount will actually pay less than they did in 2020-21.”

The government is partly to blame for the energy crisis, the founder of Ecotricity has said.

Dale Vince said they had contributed to the “stress that..millions of families” now face.

The energy firm boss said yesterday that Rishi Sunak’s financial support package for households was a “joke”.

Earlier today, the head of the British arm of energy giant E.ON urged the UK government to transition towards green energy in a long-term bid to drive down costs.

However, the chancellor Rishi Sunak has public encouraged gas drilling in the North Sea this week, sparking fury from environmental groups.

Here’s a full report from my colleague Zoe Tidman:

As mentioned, Andrew Bailey, the governor of the Bank of England, has come under fire for suggesting that there needs to be “restraint” in wage growth.

The comment was criticised by unions and Downing Street, which disagreed with the prognosis.

“We obviously want a high-growth economy and we want people’s wages to increase,” No 10 said.

“We recognise the challenge of the economic picture which Andrew Bailey set out but it’s not up for the government to set wages or advise the strategic direction or management of private companies.”

The controversy started when Mr Bailey, who took home £575,538 in pay and benefits last year, told the BBC: “It is going to be a difficult period ahead, I readily admit, because we all get we are already seeing, and we’re going to see, a reduction in real income.

“I’m not saying don’t give yourself a pay rise. This is about the size of it (any rise)... we do need to see restraint.”

InThe Independent’s latest editorial on the energy crisis, it is described as “certainly one of the worst hits on households since the end of the Second World War”.

Given this, Boris Johnson’s “restlessly upbeat, boosterish and boastful speeches sound increasingly out of touch”.

The editorial also examines Labour’s proposal to cut VAT on energy bills, which we think is as unsatisfactory as the government’s one-off rebate to tackle the crisis.

Read more here: