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Energy price cap set to rise by 80% to £3,549 as Kent charities slam government

By: Alex Jee ajee@thekmgroup.co.uk

Published: 08:03, 26 August 2022

Updated: 14:26, 26 August 2022

A charity has said the new price cap rise is "nothing short of a catastrophe" with household bills set to soar.

Ofgem has confirmed an 80.06% rise in the energy price cap, sending the average household’s yearly bill from £1,971 to £3,549 from October.

The Kent Invicta Chamber of Commerce is urging the government to bring in targeted support for businesses

The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1, and will remain in place until December 31, when it will be adjusted again.

The 4.5 million pre-payment meter customers, who are often the most vulnerable and already in fuel poverty, will see an even more punishing increase, with their average annual bill set to go up to £3,608.

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Ofgem’s chief executive Jonathan Brearley warned of the hardship energy prices will cause this winter and urged the incoming Prime Minister and new Cabinet “to provide an additional and urgent response to continued surging energy prices”.

The regulator said the increase reflected the continued rise in global wholesale gas prices, which began to surge as the world unlocked from the Covid pandemic, and had been driven still higher to record levels by Russia slowly switching off gas supplies to Europe.

Mr Brearley said: “We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.

“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.

“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.

“We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action. The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, Government, industry and consumers working together, we can find a way through this.”

Fuel poverty charities immediately called on the government to urgently extend the household support package announced in May – when the price cap was predicted to reach around £2,800 in October – “to prevent the bleakest of winters”.

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A spokesman for Canterbury Foodbank said: “This is nothing short of a catastrophe. People in the Canterbury district are already struggling with soaring inflation and these new increases will push many over the edge.

“Worryingly, there is no sign of an end, not even a beginning of an end, to this crisis. More and more people, people who never imagined it could happen to them, are being forced into poverty.

“Our data shows that CFB has provided enough food for 5,814 meals so far this month - that is almost double our figure for the same period last year.

“We will continue to support the hungry and anyone who cannot afford food should contact us. But food banks are not the permanent solution - that can only come from governments.”

Alexander Rourke, spokesman for poverty charity Thanet Iceberg, said that the government should lower taxes if it found itself unable to provide for families.

"There was a time when we went to churches, libraries, and similar because they provided us heat, but then we started paying more taxes because the government said they would look after us.

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"If they are now in a position where they have to say 'we can't help you', then they should lower taxes because they have stopped doing their job."

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “Today’s Ofgem price hike is like a dagger to the heart of millions of people up and down the country.

“As a result of the decision, parents will be unable to feed their children, the sick and elderly will be condemned to worsening health, disabled people will go without vital medical equipment and households will be forced into poverty for the first time in generations.

“All the solutions lie at the Westminster Government’s door, yet it is silent in the face of this looming disaster.”

Dartford Labour County Councillor Kelly Grehan is worried people won't cope this winter

Philippe Commaret, the managing director of energy giant EDF, has warned that half of UK households could be in fuel poverty in January as a result of rocketing prices, while Which? has urged the Government to raise its energy bills discount by at least 150% or risk pushing millions of people into financial distress.

The consumer watchdog said the Government’s financial support for all households must increase from the current £400 to £1,000 – or from £67 to £167 per month from October to March.

However, no immediate extra help will be announced by Boris Johnson’s Government, with major financial decisions being postponed until either Liz Truss or Rishi Sunak is in No 10 after the Tory leadership contest.

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On Wednesday, Chancellor Nadhim Zahawi insisted “nothing is off the table” when it comes energy bills, but added that a freeze in the price cap would not deliver “targeted help” for those who need it most.

Based on Wednesday’s gas prices, experts at consultancy Auxilione think the cap will reach £5,210 in January 2023 and £6,823 in April.

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