According to a survey released on Wednesday, British consumer energy debt is already at an all-time high, with six million families owing money to providers even before rates rise in October and again in January.

Britain is bracing for already-high energy bills to more than quadruple this year, with charities warning that if the government does not create a multi-billion-pound support plan to cushion the impact, millions of people would be plunged into poverty.

The approaching problem has put pressure on the two candidates for prime minister to lay out their plans, and it has raised concerns about whether heavy industry and homes may endure power outages later this year.

According to comparison website Uswitch, nearly a quarter of families owe providers 206 pounds ($249.10), a number that has increased by 10% in only four months. Normally, energy accounts go into credit in the summer to help fund the winter months. 

“This suggests the cost-of-living crisis is already squeezing budgets dramatically, even during the summer months, as families struggle with rising bills in all areas,” Uswitch’s Justina Miltienyte said to Reuters.

The data demonstrate the magnitude of the issue before Foreign Secretary Liz Truss and former Finance Minister Rishi Sunak, one of whom will be appointed Prime Minister on September 5 at the culmination of a weeks-long process that has stalled the political response.

Johnson’s outgoing administration has referred to a convention that it should not make substantial policy changes during the race to follow him, but Treasury minister Simon Clarke has stated officials are preparing a package of assistance measures for the future prime minister to consider. 

The two have disagreed on how best to provide assistance, with frontrunner Truss generating disquiet by stating that she would prefer cut taxes than give “handouts”.

She stated on Wednesday that she would do everything she could to help people get through the winter, but that she did not want to take money from people in taxes, only to repay it in energy assistance.

Critics argue that tax cuts will benefit the wealthy over the poorest, and consumer rights advocate Martin Lewis has called the proposal “outrageous”.

Separately, the government said that ministers will meet with CEOs of energy companies on Thursday to discuss how to respond to the “extraordinary profits” witnessed in certain areas of the electricity generation business.

In May, the government imposed a 25% windfall tax on oil and gas producers’ profits, which helped fund a package of household assistance. Wholesale gas prices have more than doubled since then.

Because of the deteriorating conditions, there have been reports that managed blackouts may be used this winter. According to the business department, the country will receive the necessary energy and gas.

The National Grid Electricity System Operator (ESO) has stated that supplies may be limited at times over the winter, but that it is prepared.

Its plans do include power from Europe, but concerns about the reliability of that supply have risen in recent months.

In early September, it will release a comprehensive winter outlook.

Source: Reuters


Please enter your comment!
Please enter your name here