The cost of turning on electricity, gas, or heating can overwhelm the family budget of millions of Britons. Ofgem, the energy regulator, has announced a 54% increase in the price of standard rates starting next April, the second in less than a year. The huge increase will affect some 22 million homes who will face an average annual bill of 2,000 euros (2,400 euros), almost 693 pounds more (827 euros) than what they had been paying after the last increase in October of around 160 euros. Finance Minister Rishi Sunak tried to reduce the effect of the hammer blow with the announcement grants and loans for those with lower incomes, given the popular clamor for the unaffordable rise in the cost of living.
Grants and loans
The Government has measures “to alleviate the shock of millions of families” so that “the price increase is small initially and is spread over a long period,” Sunak declared in the House of Commons. There will be the possibility of obtaining a refund equivalent to 180 euros of local taxes for a good part of households in April, which does not need to be repaid.
Starting in October, all households will have a discount of 240 euros in the form of loans that must be repaid and will be automatically deducted from the bills over the next five years. Local authorities will also have an extra budget for the most vulnerable. Despite those provisions, most families will have to fork out an extra €420 a year to pay their energy bill. People with less income, who can hardly bear the burdens, will be the most affected. The rise in the price of electricity and gas does not end here and another rise is expected next October.
Buy now, pay later
Labor Finance Officer Rachel Reeves believes that the proposal by Sunak and his team is not sufficient to help citizens. “What the government is offering is a buy now pay later scheme that increases the amount tomorrow, that is to say there will be higher prices”.
The cost of living increases day by day and is the issue that will keep the British sleepless this year, given the decline in purchasing power. The inflation in 2021 it was from 5,4%. The increase in the energy bill coincides with that of the contribution to Social Security (National Insurance). The Bank of England uploaded this thursday interest rates which went from 0.25% to 0.50%, which will affect a good number of mortgages. The deputy of the Liberal Democrats, Christine Jardine, accused the Government of being “playing russian roulette with taxpayers’ money, betting that prices will go down instead of providing a real solution to help families pay bills that are skyrocketing”.
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Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.