The energy price cap has gone up – and I’m terrified. Aren’t you?
It’s the moment I’ve been dreading for months, and it turns out to be exactly as bad as analysts warned
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Your support makes all the difference.I’ll admit it – I’m an anxious person. I worry about lots of things, and yes, many of those fears prove to be unjustified (a terrible accident must be the reason why someone hasn’t called back, or a wasp sting will see me die from a previously unrealised allergic reaction, or everyone I’ve ever come into contact with harbours a deep and abiding hatred for me). But there’s something that’s prompted the familiar, sick, squeezing feeling for the last couple of months that I’m certainly not alone in worrying about.
No prizes for guessing that yes, it’s my energy bill. I feel nauseous just thinking about it. For me, and for millions of others across the UK, the increase in monthly payments has been very difficult to absorb, and the prospect of even higher bills is terrifying.
This morning, Ofgem made its latest announcement on the energy price cap. It’s the moment I’ve been dreading for months, and it turns out to be exactly as bad as analysts warned. The UK energy price cap has been fixed at £3,549 per year. That’s the energy bill for a typical household – an 80 per cent rise on the current price.
In April, the cap jumped from £1,200 to £1,971. After October, Analysts reckon that it could go up again to £4,200 – and then, in the new year, to £5,300. Happy new year by candlelight, eating cold beans (probably Branston because Heinz is an unaffordable luxury) from a tin y’all!
The £771 rise in the spring was bad enough (my household energy bill doubled), coupled with inflated food prices, increases in other bills like phone and broadband, and wages dropping 3 per cent in value. Ofgem’s latest announcement means that the situation is now utterly untenable.
Today’s increase in the energy price cap is a cost that simply cannot be swallowed or “budgeted” out of for millions of households. According to research by Money Supermarket, one in four UK adults have no savings at all. Just as an example: if roughly half of your monthly take-home pay already goes on rent (aka into the pocket of a private landlord), and has done for pretty much the entirety of your adult life, then the expectation that you have a reserve of cash to dip into on a rainy day feels laughable. No savings equals no safety net.
Former chancellor Rishi Sunak did offer some cost of living assistance measures back in May. Unfortunately, they looked then – and most definitely look now – rather like a fruitless attempt to put out a forest fire using an eyedropper. A token £400 knocked off household energy bills (alongside a £650 one-off payment for households on means-tested benefits and a £300 one-off payment for pensioner households) will simply be swallowed by spiralling costs.
And a single cash lump does nothing to rectify a situation where energy costs remain at eye-wateringly high levels for at least a year to come, while wages are still stagnating – the energy price cap is forecast to stand at £4,767 in July and £4,807 in October.
It’s not nearly good enough, and with the current prime minister still missing in action and the Tory leadership frontrunner promising weird, largely unhelpful stuff like unfunded tax cuts and to challenge “Treasury orthodoxy” (your guess is as good as mine there), it feels like no one in a position to do so is taking even a smidge of responsibility.
Liz Truss has now said that she will take “decisive action” and provide “immediate support”. She has not, at the time of writing, said that she will commit to any extra financial help for households.
Remember, it won’t be MPs who feel the squeeze – over the last three years, MPs (and this list includes our very likely next PM, Liz Truss) have claimed £420,000 for energy bills in their second homes on taxpayer-funded expenses. That’s on top of their basic salary of £84,144. It won’t be the energy companies and their shareholders either, busy raking in obscene profits.
No, it’s ordinary people who are affected – the vast, vast majority of the population. The many, not the few. The British cohort that Theresa May described as “just about managing” is about to be booted squarely back into the “definitely not managing in any way, shape or form” category. Even now, any unforseen cost – such as a inpromptu visit to the dentist or the vet, or urgent home repairs – decimates precarious monthly household budgets. Too many of us are living this nervous, narrowed, day to day existence.
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And the truly vulnerable – the families already struggling to feed their kids, queuing at food banks, saddled with extra costs assosciated with disablity, unable to work or in work but needing universal credit to top up poverty wages – are at the greatest risk. They’re left facing cold homes, empty stomachs, isolation, illness and even early death. It’s not hyperbole, it’s reality – and the people in charge don’t seem to want to face it.
Perhaps the sheer scale of those affected will make the government – whatever it looks like from 5 September – sit up and take notice. When it’s not only the poorest who are feeling the strain, the crisis is not as easy to ignore; which is, in itself, a depressing indictment of our political culture.
Look across the Channel: the French aren’t putting up with this – they’ve already had their wholesale energy prices limited to a 4 per cent increase. And this is while their energy giant, EDF, charges British customers almost two-and-half times more than those in France. It’s easy to see why campaigns like Don’t Pay UK and Enough is Enough are gathering steam.
We’re living through some dark times (quite literally if you can no longer afford to put the lights on) – and as always, it’s not the rich or the powerful or those who make policy who will suffer most.