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Immediate action needed to protect families amid energy crisis, Chancellor told

This news post is 10 months old
 

Energy regulators Ofgem announced on Thursday that standard tariffs will rise 54 per cent.

Chancellor Rishi Sunak has been heavily criticised by anti-poverty charities in Scotland over his lack of action to protect the public from the worst impact of rising energy costs. 

On Thursday energy regulator Ofgem announced that the UK’s energy price cap will rise from April, with warnings households could be hit by costs going up by as much as £700 per year. 

Bills for the the average customer will rise to £1,971, Ofgem said - an annual increase of £693 in England, Wales and Scotland - which means standard tariffs will go up by 54 per cent. 

The UK Government announced shortly afterwards on Thursday morning that the 22 million people who will be affected by the record increase will receive government funded support. 

Domestic electricity customers will receive a £200 discount on their electricity bills from October, which will automatically be repaid from people's bills in equal instalments over the next five years.

Chancellor Rishi Sunak

Those in council tax bands A to D will also get a £150 council tax rebate in April, Mr Sunak said, adding: “For me to stand here and pretend we don’t have to adjust to paying higher prices would be wrong and dishonest.

“But what we can do is take the sting out of a significant price shock for millions of families by making sure that increase in prices is smaller initially and spread over a longer period.” 

Campaigners have said the Chancellor and his government have failed to live up to the responsibility they have to protect families. 

Peter Kelly, director of the Poverty Alliance, said: "People on low incomes across the country are being caught up in a rising tide of hardship, with the cost of living crisis combining with an inadequate social security system to pull them deeper into poverty. 

“Today's Ofgem announcement threatens to turn this rising tide into a flood, as more people are forced into impossible decisions like whether to pay their rent or pay for food.

“All levels of government have a moral responsibility to protect households that are reaching breaking point, but the measures announced by Rishi Sunak today fail to live up to that responsibility.

"Central to the UK Government's response should be fixing our social security system so that it helps to keep people afloat, such as by increasing benefits by 6 per cent in line with inflation and ending unjust policies like the benefit cap.

https://twitter.com/PovertyAlliance/status/1489168359895834625?s=20&t=b6YzruxDBo6m5gyfK7dqbQ

"His measures also failed to address the spectacle of energy companies making multi-billion profits while people across the country struggle to heat their homes. A windfall tax is the just and right response to this most stark injustice.

“It is clear, in the inadequacy of his measures, that the Chancellor fails to grasp the severity of the situation facing people across the country."

Those supporting households across Scotland have said immediate direct intervention must be made by the government. 

Alison Garnham, CEO of the Child Poverty Action Group, said the response from the government was piecemeal.

She said: "A day after the levelling up fanfare, the government’s piecemeal measures won’t protect low-income families either now or in the future. Surging energy prices are only the start of the crisis and what’s needed is comprehensive help with across-the-board price rises.

"The most efficient way to help households is to increase benefits to match inflation and anything less than a rise by at least 6 per cent will leave families in a desperate situation."

Citizens Advice Scotland chief executive, Derek Mitchell, said: “This eye-watering increase is a hammer blow for consumers. One in three of us already find bills unaffordable and shamefully almost half a million people in Scotland have had to cut back on food to deal with unaffordable bills.

“This simply isn’t a sustainable position for people. April will be a nightmare scenario as rising bills and prices in the shops collide with flat or falling incomes, creating a perfect storm that could sweep millions of people across the UK into poverty, debt and destitution. No one should be forced into the heart breaking choice between keeping their homes warm or feeding their families.

https://twitter.com/CitAdviceScot/status/1489178977700827141?s=20&t=wTxzji_uRV7SjePXCW7q3w

“We need immediate direct interventions. To be clear we are looking for the UK Government to intervene to limit the detriment that these unprecedented bill increases will cause. We also need a long-term plan to keep bills down.

“Boosting incomes is also vital. The CAB network plays our part here, unlocking £147 million for people during the pandemic, with those who make a gain in energy advice being around £272 better off on average. We’ll be here for people during this crisis, as we have been in communities across Scotland for more than 80 years with impartial, confidential and free advice.”

 

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