New cost-of-living crisis fear for Wales
ACHARITY has warned that half a million people in Wales could be left unable to pay their energy bills by the end of the year, after the biggest jump in prices in living memory kicked in yesterday.
The eye-watering rise in the UK energy price cap now means the typical household will pay £693 a year more for electricity and gas – with a further price hike expected in October.
New figures released yesterday suggested almost half of adults were already struggling to pay their energy bills before this week’s rise.
Some 43% of adults in Britain who pay energy bills said they were finding this very or somewhat difficult in March, according to the Office for National Statistics (ONS).
With the cost-of-living crisis continuing to bite, 6% of those with gas or electricity supplied to their homes said they were behind on these bills.
Citizens Advice Cymru (CAC) head of policy Luke Young yesterday told BBC Wales: “It’s already having an impact on people. It’s already affecting people’s choices.
“How they choose to heat their homes and what they choose to buy, and this before the price cap has even been lifted.
“From today, energy prices go up by as much as 54%, what that means is that households will see their bills going up around £2,000 a year – that is going to have an impact on people’s ability to pay,” he added.
Mr Young said the situation could get even worse if the price cap increases again in the autumn.
“We are deeply concerned that we could end up [with] half a million people in Wales unable to afford their energy bills.
“We feel that both governments need to be doing all that they can – they need a crisis response to cost of living crisis.
“As it currently stands we don’t feel that the combined action of the Welsh and UK governments really meets the scale of the challenge that households will be facing from today.”
Chief executive of the charity Home-Start Cymru, Bethan Webber, said: “Without taking action, families will fall into problem debt that will affect them for years to come.
“We need action now to support households, and make sure families can afford the ongoing increased costs for the months and years to come.”
Ed Miliband, Labour’s shadow climate and net zero secretary, said the UK Government’s response to the cost-of-living crisis had been “hopeless” in the face of a “national emergency”.
Speaking to BBC Radio 4’s World At One programme, the former opposition leader said the UK Government had “made absolutely the wrong choice in setting its face against” a windfall tax on North Sea oil and gas company profits, as argued for by Labour.
He added: “The point is this (a windfall tax) is a response to an emergency, and this is a national emergency we are facing. We have not seen a rise in energy bills anything like this ever on record.”
Criticising Chancellor Rishi Sunak’s support package, Mr Miliband said: “The real question here is does Government say, ‘Look, there is nothing we can do’?
“At best he is offering £150 of a council tax rebate but there are hundreds of thousands of families who are not in the right council tax band, and are yet in the poorest third of families who will get nothing from his scheme.
“So, it is a hopeless response from Government.”
Arguing against Labour’s idea for a windfall tax to be placed on North Sea oil and gas company profits, a minister suggested the additional money could be used by the firms to invest in “future energy resilience”.
Kit Malthouse told ITV’s Good Morning Britain programme: “It is worth remembering where those profits for energy companies go.
“They largely go into people’s pensions and supporting their pension funds, so they are helping to maintain people in their lives as well.”
Put to him that energy company bosses had reportedly said they did not know what to do with their sizeable profits, Mr Malthouse replied: “I hope that people will see through where it is going, because the one thing we’re learning in this is it is critical for us that we think about our future energy resilience, where we get our fuel and our gas from.
“What we need is a strategy that gives us more domestic capability, less exposure to the global market. That means we need our energy companies to invest here.”
Mr Malthouse, who earns £115,824 in his role as Crime and Policing Minister, and who conducted broadcast interviews with a fire on in the background, went on to say his household is facing a “tricky” time during the cost-of-liv
ing crisis, with his home central heating running on oil – which has also seen significant price rises and isn’t coverd by the energy price cap.
He told LBC: “Obviously the dayto-day is quite tricky. As you know, I’ve got children. They need to be fed and that cost is rising.
“My fuel prices are rising quite significantly, and I have to say that in my constituency I’m on oil central heating still, sadly.”
Meanwhile, as the 54% increase to Ofgem’s price cap hit bills, the Resolution Foundation think tank warned of households in “fuel stress” – the term used to describe those spending at least 10% of their total budgets on energy bills .
Resolution Foundation senior economist Jonathan Marshall said: “Today’s energy price cap rise will see the number of households experiencing fuel stress double to five million.
“Another increase in energy bills this autumn hastens the need for more immediate support, as well as a clear, long-term strategy for improving home insulation, ramping up renewable and nuclear electricity generation, and reforming energy markets so that families’ energy bills are less dependent on global gas prices.”
Citizens Advice UK chief executive Dame Clare Moriarty said the rise will be “potentially ruinous for millions of people across the country”.
The charity said around five million people would be unable to pay their energy bills from April, even accounting for the support the UK Government has announced.
It warned this number would almost triple to one in four people in the UK – more than 14 million – if the price cap rises again in October based on current predictions.
The ONS survey of 3,100 adults, conducted between March 16 and 27, also found:
87% said their cost of living has increased – up from 83% in the previous survey period in the first half of November;
just over a third (37%) said they would be able to save money in the next 12 months - down from 46% in November; and
58% said they could afford to pay an unexpected, but necessary, expense of £850, down from 61% in the previous survey period.
The most common reasons given by adults whose cost of living rose were a rise in food prices (88%), gas or electricity bills (83%) and fuel (77%).
More than half (54%) of adults said they were spending less on non-essentials, using less fuel at home (45%) and cutting back on non-essential journeys (39%) to mitigate the rise.
Concern about the pressures households are facing came as energy firms continued to struggle to allow customers to submit up-todate meter readings to avoid paying the higher tariff on energy used before April 1.
Customers reported issues logging in to supplier websites including British Gas, EDF, E.On, SSE, So Energy and Octopus Energy from early on Thursday.
Energy UK, the trade body for the industry, urged people not to worry if they were unable to submit a meter reading ahead of Friday.
It said: “Most suppliers are offering alternative options such as submitting at a later date, and different methods to send meter readings such as text, social media and email.
“This demonstrates the scale of the problem and how worried people are about high prices, which is why we have been asking Government to intervene to provide further support to consumers.”
The energy price cap for those on default tariffs who pay by direct debit has risen by £693 from £1,277 to £1,971 from April 1.
Prepayment customers will see a bigger jump, with their price cap going up by £708, from £1,309 to £2,017.
The regulator was forced to hike the energy price cap to a record £1,971 for a typical household as gas prices soared to unprecedented highs.
An Ofgem spokeswoman said: “We know this rise will be extremely worrying for many people.
“The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event, and Ofgem’s role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.
“Ofgem is working to stabilise the market and over the longer term to diversify our sources of energy, which will help protect customers from similar price shocks in the future.”
Chancellor Rishi Sunak has previously pledged to “take the sting out” of the price rises, promising all 28 million households in Britain would get a £200 upfront rebate on their energy bills from October.
The UK Government will provide the cash for this, but it wants the money back so will hike bills by £40 per year over the next five years from 2023 to recoup it.
Fuel prices have also reached record highs in recent weeks amid a rise in oil prices following Russia’s invasion of Ukraine.
Mr Sunak cut fuel duty by 5p in his spring statement last week, but retailers have been accused of failing to fully pass on the saving.
A series of demonstrations will be held across the country, including a scheduled protest in Cardiff today, over both the cost-of-living crisis and continued anger about the sacking of 800 P&O workers.
The People’s Assembly said it expects thousands of protesters will take to the streets today at locations throughout the UK – including Cardiff – to highlight those suffering “real hardships” due to the combination of rising fuel and food prices, inflation, and low pay.
Unions have complained that Chancellor Rishi Sunak’s spring statement last week did nothing to allay fears about soaring fuel bills and rising inflation.
A spokesperson for the People’s Assembly said: “Public outrage over the cost of living crisis is growing fast, and our response is gaining momentum.”