Social Justice

This week’s energy price rise is largest ‘since records began’

Labour accused the government of leaving the UK "uniquely exposed" to spikes in fossil fuels ahead of the unprecedented energy price rise

cost of living crisis

Average households could be paying out an extra £700 per year on energy. Image: Pexels

Tens of millions of households are being hit with the biggest energy price rise on record this week, say analysts.

As of Friday April 1, average fuel bills will rise by 54 per cent as Ofgem increases the energy price cap, meaning typical households will face paying out nearly £2,000 per year on electricity and heating.

This means the cost of keeping the average UK home warm will have doubled within just 18 months and burdened around 22 million households with the highest real-terms price increase since records began, according to House of Commons Library researchers commissioned by Labour.

The government is giving a £150 council tax rebate for April to cover some of the costs, and will hand households a £200 “discount” – functioning as a loan to be paid back over five years – on energy bills this October.

But the support package falls well short of what is needed to help people through the predicted drop in living standards, experts and opposition MPs have warned.

“On the day when energy bills rise by record amounts for millions of families, it is shameful that Boris Johnson and Rishi Sunak are refusing to support the British people facing a cost of living crisis,” said Ed Miliband, Labour’s shadow secretary of state for climate and net zero.

“It tells you everything you need to know about this government that they stand by whilst working people, families and pensioners suffer.”

Labour has been pushing for a one-off windfall tax on oil and gas giants, many of whom made record profits this year. 

Meanwhile the prime minister and chancellor have resisted calls to increase benefits in line with the cost of living to help the UK’s lowest-income households through the crisis, as Johnson instead insisted the government would help people into work instead of raising public spending.

“We’ve got an economy which is massively short of hands,” the prime minister told MPs this week. “We need to get those people off benefits and into work, and that’s by far the best thing for them.” Around 40 per cent of universal credit claimants already have jobs while nearly two million claimants cannot work due to sickness and disability.

As well as deciding not to use social security as a tool to target the most in need, the Conservatives have overseen “twelve years of failure” on renewables, energy efficiency and energy storage, according to Labour. A spokesperson said this left the UK “uniquely exposed to spiking fossil fuel prices”.

The energy price rise is primarily being driven by surging wholesale gas prices in the wake of the Covid-19 crisis – affecting the global market, meaning even countries like the UK with limited reliance on fuel exports feel the effects – and Russia’s invasion of Ukraine.

The UK has the least energy efficient housing in Europe, driving up costs for those living in leaky homes. But when the 2013 government – under David Cameron’s premiership – launched the Energy Company Obligation to fund insulation for more people, loft and cavity wall insulation rates collapsed by 92 per cent. 

It delivered improvements for an average 228,000 homes per year between 2013 and 2021, compared to the 1.3 million homes insulated per year through the policy it replaced.

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