Households will see an eye-watering 40% increase in gas and electricity bills this spring, whilst
Shell, a major energy company, made £32.2bn in profits last year.
Chancellor Jeremy Hunt announced he would not keep the Energy Price Guarantee at the current annual level of £2500, but increase it to £3000 in the March budget.
This 20% increase will be combined with an end to a £400 household subsidy started last October, bringing average costs up by 40%.
This comes as many energy firms involved in the extraction of oil and gas report record-breaking profits, following Russia’s invasion of Ukraine.
Although oil and gas wholesale prices have been falling from their peak in the summer of 2022, the government has said shortfalls in expected tax receipts will make it impossible to keep the EPG the same.
In an interview with the Guardian newspaper, a Treasury source explained: “If the gas price spikes, the government will need to borrow billions of pounds more…Insulating every household – and on an open-ended basis – could have major implications for the public finances.”
The Labour party has opposed the increase, they are calling for an increase in the windfall tax, a tax on excessive profits by energy companies, to shield households
Shadow Chancellor Rachel Reeves made a statement: “Millions of households are still looking at a 40% increase in their energy bills in April. And at the same time, energy companies continue to enjoy extraordinary record profits.”
Hunt said the poorest and most vulnerable will continue to receive support through government schemes, though critics point to the rise of people falling behind on payments already.
British Gas, an energy supplier, was investigated by journalists at The Times who discovered a debt collection agency was forcibly installing pay-as-you-go energy meters in people’s homes.
The revelation forced British Gas to suspend all new installations of meters.Households across the UK can expect to see a gradual fall in prices later in the year, as the fall in wholesale prices feeds through to the consumer, though this will still be 70% higher than in the winter of 2021/2022.
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