Wednesday, July 17, 2024

Energy Costs This Winter: What To Anticipate

Published:

Gordon Brown urges the creation of an emergency budget to address the issue of rising living expenses.

Gordon Brown has advised Boris Johnson and the other Conservative contenders for the party’s top job to create an emergency budget to address the cost-of-living crisis rather than risk sending millions “to a winter of dreadful hardship.”

The former chancellor and prime minister claimed in a piece published in The Observer yesterday that a “financial timebomb” is expected to “explode” in October as a result of fuel price increases for the second time in as few as six months.

He demanded that the departing prime minister Johnson and the candidates for the position, Rishi Sunak and Liz Truss, reach an agreement on an emergency budget this week. He warned that Parliament would be brought back if they didn’t.

In their debates on debt and taxes, the two candidates have “resorted to claiming the moral high ground,” but, in his words, “there is nothing moral about uncaring politicians sentencing millions of innocent and blameless children and elderly to a winter of extreme poverty.”

How much will energy costs increase?

Brown’s remarks follow a grave warning from the Bank of England last week that inflation might skyrocket to as high as 13% in October, well over the 2% inflation the central bank must maintain.

The BBC also predicted that “normal household energy expenditures will touch more than £3,600 a year this winter,” up from an average of £1,400 a year in October 2021. When the government most recently launched a support programme to help households deal with bill increases in May, the sum was “approximately £550 higher than the regulator projected,” according to Politico’s London Playbook.

How Might This Affect Homes?

As per a study in The Guardian, more than half of Britons are already “cutting back on their gas and electricity usage at home due to the worsening cost-of-living issue,” which may be a symptom of a problem about to get worse. Rising expenses disproportionately affect vulnerable populations, including the elderly and the disabled.

Between 30 March and 19 June, the Office for National Statistics estimates that 24 million people in the United Kingdom consumed less gas and electricity (ONS).

Charities have also cautioned that “the amount of bill rises” may force many lower-income people to choose “between eating and heating their homes this winter,” according to The Guardian.

Furthermore, the government’s array of assistance programmes is unlikely to be sufficient to fill the void left by rising expenditures. The help provided to low-income households will not compensate for the losses they suffer during the cost-of-living crisis, according to a report commissioned by Brown and written by Professor Donald Hirsch of Loughborough University. Some families might be up to £1,600 worse off annually; as a result, the report concluded.

The analysis concluded that the additional £1,200 provided to the most vulnerable members of society is insufficient to offset the “three blows” to household income from October 2021 to October 2022, namely the loss of the £20-a-week benefits boost, an annual increase that deviates from inflation estimates, and an increase in the energy cap. The report’s study shows that this indicates that the poorest households are unable to close the gap.

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