Warning over new energy prices surge
THE boss of energy regulator Ofgem has sounded a fresh warning on the cost-of-living crisis – saying households should expect another surge in energy prices later this year.
Delivering a speech in Glasgow, regulator chief Jonathan Brearley yesterday said: “Gas markets remain in a febrile state since the Russian invasion.
“Prices fluctuated from nearly 16 times the average price last winter at its highest to around four times what we’d usually see.
“The market remains highly volatile and as a result we do expect further price increases later this year.”
It marks the latest indication of an expected price hike in the autumn’s price cap, following on from the £693 rise in the price cap that was introduced in April.
Analysts Cornwall Insight had already predicted that a typical household will see their annual energy bill rise by £600 from October.
That would take the typical household’s gas and electricity bills to £2,595.
The speech coincided with several new developments in the UK’s cost-ofliving crisis, including:
■ The Prime Minister resisting growing calls to hold an emergency budget on the issue;
■ new figures showing UK consumers’ confidence in household finances hitting a record low; and
■ new estimates showing more than 90,000 people die in poverty in the UK every year.
Mr Brearley continued: “Many of you in the room know the impact the gas crisis has on the sector, but most importantly it is putting huge strain on the customers we serve.
“I talk to customers on a regular basis, and I know how tough rising energy prices are for many households and businesses.
“For some, not being able to afford rising energy bills is literally a matter of life and death.”
Around 1.5 million UK households will struggle to pay food and energy
bills amid a deepening cost-of-living crisis that will plunge Britain into a recession, a leading think tank warned yesterday.
Soaring inflation compounded by the war in Ukraine will see many families hit with food and energy bills greater than their disposable income, the National Institute of Economic and Social Research (Niesr) estimates.
It has called for government to offer emergency support as it predicted that more than 250,000 households will “slide into destitution” next year, with the total number in extreme poverty to hit around one million unless urgent action is taken.
Niesr said Chancellor Rishi Sunak should hike Universal Credit payments by £25 per week and give a one-off £250 cash payout to the UK’s 11.3 million lower-income households.
Meanwhile, Prime Minister Boris Johnson has told his ministers to “go faster” in delivering ideas to alleviate the cost-of-living crisis but has resisted growing pressure to hold an emergency budget.
The Prime Minister urged Cabinet ministers to be “as creative as possible” as he seeks initiatives to reduce the pain without requiring fresh funding from the Treasury.
Levelling Up Secretary Michael Gove ruled out an emergency budget, which was receiving support from some Conservative backbenchers as well as Labour.
He insisted that claims of a split between Chancellor Rishi Sunak and Mr Johnson over the need for more financial support were “overinflated”.
Under fire for failing to use the Queen’s Speech to announce fresh help, Mr Johnson suggested he and the Chancellor would announce more “in the days to come”.
But the Treasury quickly shot down Mr Johnson’s suggestion of further “fiscal firepower”.
Mr Gove told Sky News: “There won’t be an emergency budget. It is sometimes the case that the words from a prime minister or minister are overinterpreted.
“The Prime Minister is right. We will be saying more and doing more in order to help people with the costof-living challenge we face at the moment, but that doesn’t amount to an emergency budget. It is part of the work of government.
“Last night the Prime Minister convened a group of ministers – we have all done work on some of the things we could do to help. Those policy initiatives will be announced by individual departments in due course as they are worked up.”
On Tuesday, the Prime Minister chaired a meeting of the domestic and economic strategy committee with senior ministers, including Mr Sunak.
Mr Johnson’s official spokesman said: “The Prime Minister urged ministers to go faster and be as creative as possible in ensuring the government is doing everything on this important issue.”
No 10 said the Chancellor had already set out “substantial support” in the form of “fiscal measures”, but the work now is looking for other ideas.
The spokesman added: “In the days to come you will hear more from the Prime Minister on this. The Chancellor and the Prime Minister are working extremely closely on this and will continue to do so.”
But he said there are “no plans” for an emergency budget.
Households face soaring energy bills, inflation is forecast to hit 10% and welfare payments and wages are falling far behind the increase in prices.
Tory MP Lee Anderson yesterday faced calls to apologise for claiming people in the UK use food banks because they “cannot cook properly” and “cannot budget”.
And Mr Gove faced criticism for dismissing the prospects of an “emergency budget” with an impression of an American newsreader, before mimicking the Treasury, saying “Calm down” in a mock-Scouse accent.
Lisa Nandy, his Labour shadow, tweeted: “What is he doing!? Making jokes and using silly voices while families across the country are struggling to survive.
“This isn’t a game (or an Oxford Union debate!). People are having to choose between heating and eating.”
In the meantime, charities, campaigners and opposition politicians have criticised the lack of any shortterm measures to help people faced with soaring costs in their day-today lives.
Labour leader Sir Keir Starmer called the UK Government’s response “pathetic” as he was joined by charities and economic experts in criticising Mr Johnson’s plans.
He told Mr Johnson: “This government’s failure to grow the economy over a decade, combined with its inertia in the face of spiralling bills, means that we are staring down the barrel of something we haven’t seen in decades, a stagflation crisis.”
The Child Poverty Action Group said there was “no short-term comfort for parents struggling to feed their kids in the face of rocketing prices”.
And Torsten Bell, chief executive of the Resolution Foundation think tank, said ministers had not announced “anything that will make a material difference” to boosting economic growth.
The former Labour adviser tweeted: “Nothing material today on the short term nightmare of cost of living – government has basically made up its mind to wait until September (when we find out how bad winter energy prices will be).
“The pattern here is help being too slow, too small and poorly targeted.”
The UK Government has highlighted a £22bn package of help with energy bills, tax cuts and other measures already announced.
Mr Johnson said the “aftershocks of Covid-19 and the biggest war in Europe since 1945” are causing disruption around the world, with all major economies facing cost-of-living pressures.
WHEN a senior Cabinet member does silly voices at a time of national crisis, it’s clear that something is badly wrong.
Michael Gove would doubtless claim he was making a serious point in a lighthearted way when he imitated an American anchorman and a spokesman for the Treasury, but for millions of people who are worried about the future, it simply wasn’t funny.
Inflation is going through the roof, wages are way behind prices and those in the most vulnerable position are literally deciding whether they can afford to eat or keep their homes warm.
Many would think an emergency Budget was just what was called for at the present time.
But despite what Mr Gove may say in public, it seems there is a serious disagreement between the
Prime Minister and the Chancellor over what should be done.
The government’s official line at present is that no money is available to help hard-pressed citizens, although according to Mr Gove we can expect a series of announcements from different government departments in the coming days and weeks.
As the minister in charge of “Levelling Up”, we must expect that one of the departments involved is his own.
Yet so far the management of the post-Brexit regional aid programmes has left a lot to be desired, characterised by delays and then demands that councils meet tight deadlines when bidding for funds.
In Wales the promise to match EU funding has not materialised – and communities in England who had high hopes of getting economic help are finding that it falls far short of what they expected.
In contrast to what has happened in France, Boris Johnson’s government has stood aside and refused to impose a cap on energy price rises.
We have reached a point where the lack of a coherent plan from the UK Government about how to deal with the cost of living crisis is leading to a bigger crisis of confidence of epic proportions.
Inflation keeps rising, but those in charge of economic levers seem incapable of acting decisively or offering sufficient relief.
This can’t continue. Instead of senior ministers fighting battles behind the scenes over what should happen next, there’s an urgent need for a clear plan that gives people hope.
Sadly, it appears that none of us should hold our breath.