U.K. energy prices will rise on average by 80% from 1 October,the energy regulator OFGEM has announced this morning
The price cap will rise to an average of £3549 per year fuelled by record gas prices and the regulator said that the market for gas in Winter means that prices could get significantly worse through 2023.
Jonathan Brearley, CEO of Ofgem, said:
“We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
“The price of energy has reached record levels driven by an aggressive economic act by the Russian state. They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year. We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action. The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
Katie Schmuecker, Principal Policy Adviser for the Joseph Rowntree Foundation said:
“It is simply unthinkable that the price rises announced today can go ahead without further Government intervention on a significant scale. To force the burden of rising wholesale energy prices onto households will plunge many into destitution. Millions more will face the threat of bills they simply cannot pay, homes they cannot heat and stomachs they cannot fill.
“It is the job of Government to decide how the burden is fairly shared between families, businesses and the public finances. Whoever occupies number 10 next will be remembered for who they protect – they must make sure energy doesn’t become a luxury only the wealthy can afford.
“People are already being pushed into heart-breaking situations, disconnecting themselves from energy, skipping showers and going without food so their children can eat. And this is before we’ve even hit the big price rise and colder weather. Households are crying out for certainty and security.
“The Government must immediately respond with a comprehensive emergency package to cover the period of these extreme price rises, just as they did so creatively and quickly with furlough during the early stages of the pandemic.
“The crucial tests will be whether help is weighted toward the worst off, whether it is sufficiently large in scale and and whether it covers the period of high prices – which now look set to last into next winter. This will buy some breathing space to fix the underlying problems of the energy market, and a social security system that has been hollowed out by a decade of cuts and freezes.”
Morgan Vine, Head of Policy and Influencing at Independent Age, said:
“Today’s Ofgem energy price cap announcement confirms a fear held by many in later life; we are facing a winter of despair.
“The extortionate new energy price means that someone who lives off their State Pension would have to spend more than a third of their income on energy alone. For others in later life with lower State Pensions, the situation will be even more dire.
“This price hike is not something older people can simply endure. Millions of older people on low incomes will be forced daily to make dangerous decisions. For many it will no longer be a choice between heating their home or eating a meal, they will be unable to do either. If the government takes no action, more people will die this winter because of fuel poverty. This would truly be a dereliction of duty and cannot be allowed to happen.
“The government needs to announce an immediate package of support that is fast acting and big enough to ensure all older people who need help can afford to heat their homes this winter. There is no time to kick the can down the road to the new Prime Minster, millions of older people in financial hardship need support now.”
