Britain to see 80% rise in energy bills as crisis deepens

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LONDON (AP) — Jennifer Jones guards inject money into his energy meter, but it never seems to be enough. And when she can’t pay, she immediately feels the impact.

The power in his London home suddenly went out three times recently, once when his partner was cooking an egg.

Like millions of people, Jones, 54, is struggling to cope as energy and food prices are skyrocketing during Britain’s worst cost of living crisis for a generation. The former school supervisor has health problems and relies on government benefits to get by, but her social benefits are far from enough to cover her. rising bills.

“I always struggled, but not as much,” she said. “Everything goes up. I can’t even pay my rent, my housing tax, I don’t have the means to do anything. …I keep asking myself, what am I supposed to do?

And things are getting worse. British residents will see an 80% increase in their annual household energy bills, the country’s energy regulator said on Friday, after a record peak of 54% in April. This will bring costs for the average customer from 1,971 pounds ($2,332) per year to 3,549 pounds.

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 cold months set in. And bills are expected to rise further in January to £4,000.

To blame for the increase is the spike in wholesale natural gas prices triggered by Russia’s War in Ukrainewhich drives up consumer prices and boiling economies across Europe who depend on fuel to heat homes and generate electricity.

This includes the UK, which has the highest inflation rate among the wealthiest democracies in the Group of Seven and seen disruptive strikes for months like workers push for wages to keep pace with the rising cost of living.

Energy increases, as well as rapidly rising food pricesshould push inflation above the 40-year high of 10.1% recorded in July and trigger a recession later this year, predicted the Bank of England. Charities, public health officials and even energy companies are warning of catastrophic effects on the poorest people are already struggling to afford basic necessities because wages are lagging behind.

Jon Taylor, who helps Jones and others at the debt counseling charity Christians Against Poverty, said a growing number of people who have never had debt problems are turning to the group’s helpline.

“What I’m seeing a lot right now are personal tragedies, loss of 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 compounds what they are already going through.”

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

The decline in living standards is “on a scale we haven’t seen in many decades”, said Rebecca McDonald, the charity’s chief economist. “This really warrants significant and creative national policy interventions to prevent what is a difficult year from essentially becoming a disaster for many low-income families.”

Britain’s Conservative government is under heavy pressure do more to help people and businesses — and fast. Authorities said they were sending about 1,200 pounds to low-income people. Every household, regardless of financial situation, will benefit from a £400 reduction on their energy bill this winter.

Many say financial support needs to be doubled – at least – and some have called for an immediate freeze on how much suppliers can charge for energy. The opposition Labor Party has called for an extension of the government’s temporary mandate tax on windfall profits of oil and gas companies to help pay for relief.

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

Treasury chief Nadhim Zahawi acknowledged that raising the energy price cap would cause “stress and anxiety”. But he insisted the government was ready to develop more options to support households.

“As (Russian President Vladimir) Putin drives up energy prices in revenge for our support of Ukraine’s courageous struggle for freedom, I am working hard to develop options for support extra,” he said. “It means the new Prime Minister will be able to step up and provide support to those who need it most, as soon as possible.”

Unions in several key sectors have reacted by go on strike to demand wage increases that keep pace with inflation. A series of nationwide rail strikes have brought Britain’s rail network to a standstill during peak days this summer, and postal services and port workersgarbage collectors and lawyers have all staged walkouts over pay disputes.

Meanwhile, a grassroots movement called “Don’t Pay” is campaigning to bring together 1 million people to pledge not to pay their energy bills on October 1 if the price hike continues. The group hopes the massive non-payment will force energy companies to end the crisis.

“Everyone we talk to thinks the price increases we’ve seen and are going to see on October 1 are beyond a joke and will drive people over the edge,” said Jeffrey James, one campaign organizers.

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

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AP reporter Danica Kirka contributed from London.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.

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