Cost of energy needs reform

Long term solution required

THIS YEAR millions of people around Britain will be hit by the largest increase in energy costs since records began.

Household energy bills will soar by £693 per year from April after the energy regulator Ofgem was forced to hike the energy price cap to a record £1,971 for a typical household.

With gas prices having soared to unprecedented highs some 22 million households across Great Britain who are on their energy supplier’s default tariff will effectively be hit with the equivalent of a second mortgage payment.

All this on top of another increase in interest rates, increased National Insurance payments and an ongoing cost of living crisis which is squeezing household budgets to an intolerable degree.

The actions of the Chancellor Rishi Sunak, while very much delivered at the 11th hour, is welcome and will provide some welcome relief for those households impacted. Just over half of the £693 increase will be met with a Government loan which will be paid back in instalments over the next five years. Some 80 per cent of all homes in England will also benefit from a council tax rebate of £150 to help with the cost of energy and local authorities will also be handed a discretionary fund of nearly £150m to help those lower income households who live in higher council tax properties.

It is pleasing that the Chancellor has suppressed his natural inclination to be as noninterventionist as possible when it comes to the economy and acted to help families in crisis.

However the focus must now turn to the muchneeded long term structural changes to fix our energy supply chain. The switch to renewables will bring us greater autonomy but will not come on stream for many years.

Rapid action is required right now to make sure no household should ever be worried about keeping their children warm.