Britain sees 80% spike in energy bills as crisis worsens

LONDON — Jennifer Jones keeps putting money into her energy meter, but it never seems to be enough. And if she can’t pay, she feels the impact right away.

The power in her London home has suddenly gone out three times recently, once when her partner was cooking an egg.

Like millions of people, Jones, 54, struggles to cope as energy and food prices skyrocket during Britain’s worst cost-of-living crisis in a generation. The former school counselor has health problems and depends on government benefits to make ends meet, but her benefits aren’t nearly enough to cover her soaring bills.

“I’ve always struggled, but not so much,” she said. “Everything is going up. I can’t even pay my rent, my council tax, I can’t afford to do anything. … I keep asking myself, what should I do?”

And things get worse. UK residents will see their annual household energy bills rise another 80%, the country’s energy regulator announced Friday, following a record 54% peak in April. That brings the cost to the average customer from £1,971 ($2,332) per year to £3,549.

The final price cap – the maximum amount gas suppliers can charge customers per unit of energy – will come into effect on October 1, just as the colder months begin. And bills are expected to rise again to £4,000 in January.

The cause of the increase is the rising price of wholesale gas as a result of the Russian war in Ukraine, which has hit consumer prices and runaway economies across Europe, which depend on fuel to heat homes and generate electricity. drives up.

So is the United Kingdom, which has the highest inflation rate of the Group of Seven Richest Democracies and has experienced months of disruptive strikes as workers push for wages to keep pace with the increasingly expensive cost of living.

The energy surges, along with rapidly rising food costs, are expected to push inflation above the 40-year high of 10.1% in July and trigger a recession later this year, the Bank of England has forecast. Charities, public health leaders and even energy companies are warning of catastrophic consequences for poorer people who are already struggling to afford basic necessities as wages lag.

Jon Taylor, who helps Jones and others at the Christian Against Poverty charity, says more and more people who have never been in debt are turning to the group’s helpline.

“What I see a lot at the moment are personal tragedies, losing loved ones, emotional health issues,” he said. “The pressure of not knowing how to pay the next bill or having enough food to survive only accentuates what they’re already going through.”

About 1 million low-income households have had to take on new or additional debt to cover a vital bill, according to a May survey by the Joseph Rowntree Foundation, a non-profit organization that focuses on poverty in the UK.

The decline in living standards is “of a magnitude we haven’t seen in decades,” said Rebecca McDonald, the charity’s chief economist. “It justifies really big and creative national policy interventions to prevent a difficult year from essentially becoming a catastrophe for many low-income families.”

Britain’s Conservative government is under intense pressure to do more to help people and businesses – and quickly. Authorities have said they are sending about £1,200 to low-income people. Every household, regardless of their financial situation, will get £400 off their energy bills this winter.

Many say financial support should be doubled – at the very least – and some have called for an immediate freeze on the amount suppliers can charge for energy. The opposition Labor party has called for an extension of the government’s temporary tax on oil and gas companies’ unexpected profits to help pay for the relief.

But the government has said no further measures will be announced until the Conservative Party announces a new leader to replace Boris Johnson on September 5. Neither Liz Truss nor Rishi Sunak, the two politicians vying for the next prime minister, appear to be taxing energy giants.

Unions in several key sectors have responded by going on strike to demand wage increases to keep pace with inflation. A series of national rail strikes has brought Britain’s train network to a standstill during busy travel days this summer, and postal and dock workers, garbage collectors and lawyers have all staged strikes over wage disputes.

Meanwhile, a grassroots movement called “Don’t Pay” is campaigning to rally 1 million people who pledge not to pay their energy bills by October 1 if the price hike continues. The group hopes mass default will force energy companies to end the crisis.

“Everyone we speak to thinks the price hikes we’ve seen and will see on October 1 are more than a joke and will push people to their limits,” said Jeffrey James, one of the campaign’s organizers.

“We are being forced into poverty, while others who are already in poverty will be forced into a situation of life or death this winter,” he added. “That’s the level of discontent and despair we’re talking about.”