The British will know on Friday the magnitude of the increase in maximum electricity prices that will take effect in October and that threatens to push 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 avert a “dramatic” shock to low-income households, already facing inflation of more than 10%, the highest of any G7 country. Poverty think tank the Resolution Foundation calls for “radical” action to avert “a catastrophe this winter” that could damage both the wallet and the health of families.
With many precarious households relying on meters that can be recharged with coins or credit little by little, “we are left to see thousands (of households) with sudden power outages,” adds the Resolution Foundation. According to the University of York, 58% of British households are at risk of energy poverty in the coming year.
fuel poverty
“We’re seeing a lot of stress among our customers. The average debt per customer has increased by 30% to £167. I’d say around a third of our customers are energy poor and another 20% could become “, 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 hard time,” she predicted to AFP, planning for her part to replace the heating with sweaters and blankets.
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 that she describes as “bandages”.
The current Minister of Business and Energy, Kwasi Kwarteng, was inclined to become Minister of Economy and Finance of his government if he wins, however, he multiplies meetings with energy providers and assured that “help is coming”, without further ado. details.
“Fairy tales”
Rishi Sunak, Liz Truss’s rival and former Chancellor of the Exchequer, calls Liz Truss’s proposed tax cuts “fairy tales” given 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. This 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” would make it possible to stabilize bills and not pass on dizzying increases immediately, and then clients “recovered” the fund when prices fell again. Others mention a direct aid of 1000 pounds, or, like the Resolution Foundation, a “solidarity tax” 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, maintains that SMEs are also suffering greatly from the energy boom and a “cost of production” crisis.
Source: BFM TV
