Due to rising gas prices, regulator Ofgem is expected to announce an increase in the maximum price of £1,971 per year for an average household to over £3,500.
The British will learn on Friday August 26 the scope of the increase in electricity price caps that will come into force in October and that threatens to plunge millions of people into energy poverty. Due to the rise in gas prices, an important part of the country’s energy mix, regulator Ofgem should announce an increase in the price cap from the current 1,971 pounds a year for an average household to more than 3,500 pounds, according to experts. At the beginning of 2023, the threshold could rise to 6,000 pounds according to the most pessimistic projections.
Employers, suppliers and associations are calling for urgent government action to avoid a “dramatic” shock to low-income households, already facing inflation of more than 10%, the highest of the G7 countries. Anti-poverty think tank Resolution Foundation calls for action “radicals” to avoid “a disaster this winter” risking damaging both the wallet and the health of families. With many precarious households relying on meters that can be recharged with coins or credit on a piecemeal basis, “we went to see thousands (of houses) awith sudden blackouts”adds Resolution Foundation.
According to the University of York, 58% of British households are at risk of energy poverty in the coming year. “We are seeing a situation of great stress among our clients. The average debt per client increases by 30% to 167 pounds. I would say that around a third of our customers are in a situation of energy poverty and another 20% could become so”, emphasizes Philippe Commaret, EDF’s commercial director for the United Kingdom. He adds that some households take desperate and dangerous measures for themselves, such as stopping heating or unplugging the refrigerator.
Diane Skidmore, a 72-year-old pensioner living in social housing in south London on £600 (just over £700) a month, has seen her monthly bill fall from £25 to £45 in no time. more than a year. She just received a letter from her energy provider asking her to plan for the next 70 pound flow rates. “Everyone is going to have a bad time”he predicted to AFP, planning for his part to replace the heating with sweaters and blankets.
“Help is Coming”
Conservative Prime Minister Boris Johnson, on leaving, has decided to leave this politically sensitive file to the next head of government whose name will be announced on September 5, at the end of a campaign under the sign of the cost of living. The favorite to replace Boris Johnson, Thatcherite Liz Truss herself, has so far favored tax cuts over direct aid, which she describes as “bandages”. The current Minister of Business and Energy, Kwasi Kwarteng, was inclined to become Minister of Economy and Finance of her government if she wins, however, she multiplies meetings with energy providers and assured that “help is coming”without further details.
Rishi Sunak, a rival of Liz Truss and himself a former finance minister, calls Liz Truss’s proposed tax cuts a “fairy tale” with inflation and the economy on the verge of recession. He argues that the tax cuts will have no impact on low-income households that do not pay them and proposes to increase the direct aid already in place (400 pounds per household in addition to other targeted subsidies). Labor Opposition Leader Keir Starmer calls for electricity bills to be frozen, modeled on what is happening in France. He is also what Scottish Power, one of the largest electricity companies in the country, is proposing, which refers to a term of two years and a colossal cost of 100,000 million pounds for the State.
The French group EDF, also one of the country’s suppliers and manager of nuclear power plants, raises the idea of smoothing bills in the medium or long term: a “deficit fund” it would allow to stabilize the invoices and not to pass the vertiginous increases immediately, later to the clients “I would refund” the bottom when prices fall again. Others mention direct aid of 1,000 pounds, or, like the Resolution Foundation, a “solidarity fee” of 1%. EDF and the environmental associations also call for a real reflection on energy saving, largely absent from the public debate, despite repeated requests from environmentalists and even employers. The Federation of Small Businesses, for its part, argues that SMEs are also suffering greatly from the energy boom and a “cost of production” crisis.
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