The Government will help people more over the coming months, a minister has promised. Will Quince, an education minister, made the pledge ahead of record energy bills set to be announced on Friday.
Mr Quince said there is “no question” there will be further support on top of what was announced in May. Energy bills are widely expected to top £3,500 per year for the average household from the start of October, compared to £1,971 today.
“There is no question in my mind whatsoever, both listening to the two leadership candidates but also just looking at our economy … that the Government is going to act and put in place a further package of support measures,” Mr Quince told LBC radio. “Now, we will have to wait a couple of weeks for a new Prime Minister to set out their agenda alongside a new Chancellor, but both leadership contenders have been clear there will be a fiscal event and more help will be coming.”
It comes amid increasing calls on the Government to introduce radical support, comparable to the furlough and loan schemes at the start of the pandemic. Resolution Foundation boss Torsten Bell said on Thursday the massive spike means that “radically rethought policy answers are needed otherwise we’re heading for thousands having their energy shut off and millions running up arrears”.
He added: “When we thought bills were heading to mid-£2,000s, the textbook economic answer of let prices rise (so everyone has incentives to cut use) (and) support lower income households was … the right answer. But it’s time to recognise that is not the world we’re living in.”
Ofgem will announce the new price cap on Friday morning. Analysts expect the cap to be set at between £3,550 and £3,600 for the average household.
That will not be the end of it. More than £1,000 is expected to be added to the cap in January.
By April it might have hit £6,823, according to one forecast published by Auxilione on Thursday morning. The rises are hitting home with households as a tracker from Which? showed that satisfaction with UK living standards and income has plunged.
The consumer insight tracker showed satisfaction at its lowest point since 2014, even before Ofgem announces the cap hike. Some 93% of consumers said they were worried about energy prices.
The watchdog’s latest survey found just over half of consumers (55%) are currently satisfied with their standards of living while just 39% are content with their household income and 34% are happy with their savings. Confidence in household finances has plunged to the level it was at the start of the pandemic as inflation driven largely by food and energy prices reached a 40-year high.
Which? said it was clear that the Government’s current package to help with the soaring cost of living would not sufficiently protect consumers. Which? director of policy and advocacy Rocio Concha said: “The Government must move quickly to increase the amount of financial support it is providing to families and households who are struggling.
“Tackling the cost-of-living crisis must be at the top of the new prime minister’s in-tray. Businesses should also do everything in their power to make sure customers are getting a good deal and those facing serious financial hardship are protected.”
Citizens Advice said that it has seen a spike in people worried about their bills even before they hit the eye-watering levels expected this winter. “We’re seeing huge numbers of people coming to us who have never had to turn to Citizens Advice before for help, who have never had problems with bills before,” David Mendes da Costa, principal policy manager, told the PA news agency.
“Government has a critical role in all of this and there has to be a package of support, and it has to come now.” Vulnerable groups are particularly worried about what the energy price spike will mean for them.
Kidney Care UK warned that the cost of running a home dialysis machine could be more than £2,200 per year from January if current predictions come true.
