Gas and electricity bills to rise by £693 as Sunak announces £350 support package
Millions of UK households will see their gas and electricity bills jump by more than 50 per cent in April after energy regulator Ofgem announced a record-breaking increase to its price cap.
The new cap will allow suppliers to charge customers a maximum of £1,971 per year, meaning energy bills for the average household will increase by £693.
Rishi Sunak has announced a council tax rebate to ease the pressure of rising bills on consumers, who also face high inflation and a tax rise.
The chancellor said households in council tax bands A to D would receive £150 back in April to offset the huge cost of living squeeze that will take hold then.
Along with the price cap rise from 1 April, taxpayers will be hit that month by the 1.25 per cent National Insurance hike and inflation is forecast to be higher.
The response in the energy sector was critical to early reports of the plan, with the boss of supplier Ecotricity calling the measures “far too little, far too late”.
More than a quarter of people in UK already struggling financially, survey finds
Cost of living research found that more than one-quarter of people in the UK were already struggling financially, with a further 30 per cent expecting to soon be struggling.
Round-up of the key points from the KIS Finance research:
- 27 per cent already struggling financially as direct result of the rising cost of living.
- 30 per cent expect financial problems in the very near future as the impact of rising prices bites.
- 35.5 per cent of 18-24 year olds already financially struggling.
- 36 per cent of over 55s worried that they will struggle as prices continue to rise.
- 30 per cent already struggling financially in southeast England – the most affected region.
- 22 per cent of 18-34 year olds have had to take a second job just to make ends meet since pandemic.
Liam James3 February 2022 14:54
Andrew Bailey: Interest rates rise necessary to bring inflation down
From Andrew Bailey, governor of the Bank of England, on the interest rates rise:
“We have not raised interest rates today because the economy is roaring away.
“The economy is only now back to the size it was immediately before the pandemic, a couple of years ago.
“An increase in Bank rate is necessary because it is unlikely that inflation will return to target without it.”
Liam James3 February 2022 14:43
Bank of England raises interest rate as it predicts inflation to hit 30-year high
The Bank of England has raised interest rates from 0.25 to 0.5 per cent in an attempt to tackle inflation.
The Bank’s monetary policy committee voted 5-4 to raise the rate as — effecting the first back-to-back rise since 2004 after raising it from 0.1 per cent at the last committee meeting in December.
Four of the nine members called for the rate to rise to 0.75 per cent.
The Bank forecast that soaring energy prices will drive inflation to 7.25 per cent in April, the highest level since August 1991.
This will see household disposable income fall by around 2 per cent, the worst impact since Bank records began in 1990.
In the same month, households will be hit by a 54 per cent rise in the energy price cap and a 1.25 per cent rise in National Insurance contributions.
The Bank has predicted that the price cap will rise again by around 10 per cent in October.
It has elsewhere been predicted that energy bills will continue to rise for two to three years.
The Bank downgraded its growth outlook to 3.75 per cent in 2022 and 1.25 per cent in 2023 from the 5 per cent and 1.5 per cent respectively predicted in November.
Liam James3 February 2022 14:27
Rishi Sunak ‘most incompetent Chancellor I have ever seen’, says veteran Labour MP
Barry Sheerman said other chancellors would have resigned over Covid fraud
Liam James3 February 2022 13:58
Shadow chancellor criticises Sunak’s ‘buy now, pay later’ scheme
Shadow chancellor Rachel Reeves said millions of people are cutting back spending to pay bills, adding: “What do the Government offer? A buy now, pay later scheme that loads up costs for tomorrow.
“The best way of targeting support to those who need it most would be an increase to £400 and an extension to 9 million households of the warm homes discount, as Labour has proposed today. Their scheme today is a pale imitation of Labour’s, especially for the households and pensioners on the most modest incomes,” she added.
Joe Middleton3 February 2022 13:41
PM backs Sunak’s £9bl support package
Boris Johnson today insisted the £9 billion package unveiled by the Chancellor to help millions with the energy price hike was necessary.
“This is a mega package of £9 billion on top (of existing measures) which is necessary but it’s huge,” he told reporters.
“That is there to help people with this particular spike that we are seeing right now.
“What I hope and believe is that eventually, as the world economy gets its momentum back, the inflationary pressures will start to subside.”
One way to get inflation under control is to “ease those problems in the supply chain” and “get people to work in the jobs where they are needed”.
Joe Middleton3 February 2022 13:23
MPs react to energy bill hike and Sunak’s rebate plan
MPs have today reacted negatively to a large hike in energy bills for millions and criticised Rishi Sunak’s rebate plan.
Labour MP Ed Miliband said today was a “betrayal” and that millions were facing the “biggest crisis” from the price rise. He criticised Mr Sunak’s plan to help families and said it was a “loan” not available until October.
Tory MP Tom Tugendhat said that “April showers won’t be cheap” and that the price hike will “hit families across the country just as the new NI tax kicks in”.
Barry Sheerman, who has been Labour MP for Huddersfield since 1979, told the House of Commons, that Mr Sunak was the “the most incompetent Chancellor I have ever seen”.
He said: “Can I tell him that someone who has been in this House since 1979, he is the most incompetent Chancellor I have ever seen.
“When children in my constituency go to bed with no food in their tummies, with no heating in their homes, what does he really think is the honourable position of a Chancellor who has just allowed one of his policies directly to be taken in fraud… £4.3 billion of fraud under his watch?
“Any other Chancellor that I have known would have come to the House today to resign.”
Labour MP Chris Byrant told MPs that the £350 support package from Mr Sunak was “puny”.
Joe Middleton3 February 2022 13:05
Former Cabinet Minister questions support for ‘middle Britain’
Conservative MP and former Cabinet Minister Esther McVey today questioned support for “middle Britain”.
She said: “Many families across the country will struggle with their energy bills this year so I am grateful that we have a Chancellor who’s in touch with that. Will he commit to continue to ensure those in middle Britain are supported by this Government, as well as those on the very lowest of incomes.”
Mr Sunak replied: “Both I and this Government are committed to being on the side of those hard working families.”
Labour’s Nick Smith (Blaenau Gwent) said: “Does he really think that the super profits of 20 billion dollars made by Shell are untouchable? His hands-off approach won’t persuade many people across our country.”
Mr Sunak replied: “I think what millions of people across this country will see today is a Government that is on their side.
“It is a Government that is taking action to help them with the anxiety they fear about rising energy bills, it is doing it in a proportionate, fair and targeted way and it is doing it in a responsible way to protect them not just today but for years into the future as well.”
Joe Middleton3 February 2022 12:48
Boost benefits to help poor with energy bills, says anti-poverty group
The head of an anti-poverty group said the government’s measures to tackle rising energy bills would be ineffective for low-income families.
Alison Garnham, chief executive of the Child Poverty Action Group, said raising benefits was the bes to help poorer households.
She said: “A day after the levelling up fanfare, the government’s piecemeal measures won’t protect low-income families either now or in the future.
”Surging energy prices are only the start of the crisis and what’s needed is comprehensive help with across-the-board price rises.
“The most efficient way to help households is to increase benefits to match inflation and anything less than a rise by at least 6 per cent will leave families in a desperate situation.”
Liam James3 February 2022 12:40
Gas and electricity bills to rise by £693 as Sunak announces council tax rebate
Joe Middleton3 February 2022 12:34