Economy

Truss energy bill freeze brings little cheer to struggling households | Energy industry

Liz Truss has announced that energy bills for the typical household in Great Britain will be frozen at £2,500 a year until 2024, superseding Ofgem’sprice cap that was supposed to rise to £3,549 for the average home on 1 October.

The new prime minister says the measure, as part of a taxpayer-funded £150bn support package, will save the typical household £1,000 a year. On top of this they will get £400 off bills, promised earlier this year.

Here, five people in different circumstances from across the country give their verdict on the support package and where it will leave them this winter.

‘We’re going to end up paying all this back’

Kayleigh, from Milton Keynes
Kayleigh, from Milton Keynes, has told her children to wear jumpers this winter.

Kayleigh, 36, a single mother of four children from Milton Keynes who works in a hotel, saw no option but to cancel her direct debit for October, after her energy provider, Ovo, quoted her a fixed dual-fuel rate more than her housing costs.

“If I wanted to go on to the fixed rate in April, that would have been £280 a month,” Kayleigh said. “Now a fixed rate is £504 a month.” She added that even the government’s new average bill cap was still too high for her.

“Liz Truss is just ensuring that the companies get to keep their billion-pound profits,” Kayleigh said. “We’re going to end up paying all this back. The only thing I can do is just accept that I will be in debt to my energy company. I can’t magic money out of thin air.

“I’ve already had conversations with the kids about, you know, when you come down in the morning, you can bring your duvet in the winter downstairs, just so I don’t have to necessarily have the heating on for a long time in the mornings.”

‘I can’t meet the costs of my current energy bills’

Cate, 60, from Southampton, is disabled and rents a council flat. She recently stopped paying her electricity bill, after her direct debit went from £23 a month to £61.

“With the rising costs of absolutely everything it’s simply not possible for me to pay a £40 a month increase,” she said. “I’m in arrears because I simply can’t afford this and have no idea what I will do when the next increase comes around. Today’s announcement leaves me none the wiser how I will be affected as it lacks all the detail, and it doesn’t seem to have been costed at this point – Labour’s windfall tax had been.”

Cate criticised the lack of detail on what support was on offer, saying Truss’s offer would “barely touch the sides” this winter. “I can’t use food banks to tide me over as I am on a special diet which they can’t cater for. Truss has gone for the possibly most expensive, least targeted option that won’t be very helpful for people on benefits that aren’t keeping up with the cost of living.

“I’m looking into debt relief options now, as I have no way in hell of meeting the costs of my current energy bills. I have no idea what to do or how to cope.”

‘This doesn’t go far enough’

Ken Taylor, 72, a retired salesperson from Sherburn in Elmet, North Yorkshire, told the Guardian earlier this year that his monthly income of £1,188, from a state pension and a small work pension, only left him with £92 after paying for essentials.

Ken Taylor, a pensioner, says what little disposable income he has left after essentials has been swallowed up entirely by rising costs.
Ken Taylor, a pensioner, says what little income he has left after essentials has been swallowed up by rising costs.

Now he comes up £20 short a month, as prices for groceries have risen dramatically.

“This [energy price support] doesn’t go far enough. I’m always running out of money at the end of the month, and I’m not convinced it’s proven in any way that these policies of Truss will help curb inflation,” said Taylor.

“She has capped energy costs at a level that is too high, and it’s galling that the prime minister prefers ordinary people like me to pay for this in future years, possibly with higher income tax, rather than introduce the energy windfall tax I wanted to see. I couldn’t believe it when she ruled it out. The Tories’ usual way to pay for things is to cut public services, and this is just another way to charge the public.

“In my area there are so many pensioners who are really scared about all this. I’m disappointed that she doesn’t grasp what is happening to ordinary people at the moment.”

‘How will people like us get these funds?’

Truss said that among the measures announced would be an extra fund to ensure people in park homes and those who used heating oil would receive “equivalent support” with energy bills.

Emma Wood, who lives in a static caravan on a site in Devon alongside 17 other residents who are Roma and New Travellers, welcomed Thursday’s support package but said many questions remained.

“When and how will people like us get these funds? Bills will still be double or triple what they were before this whole crisis started. Our gas bottles are currently £62 each. We use one of these every two weeks in winter if we live frugally. We have no idea how much they’ll be on 1 October.”

Wood told the Guardian last month that she feared missing out on the government’s £400 energy bill support payment for private households, which will still be introduced under Truss.

Her energy supplier, Scottish Power, has confirmed that only one grant will be applied to the site’s main meter, meaning 12 households will have to share one £400 payment, instead of accessing the £4,800 they would have been entitled to in total.

“I’m stuck, and will be writing to my MP again this afternoon, and see what he comes up with,” Wood added.

‘I’m pleased a cap has been introduced’

Tim Hooper, 50, from Norfolk, is unemployed and gets his energy from a prepayment meter.

When the Guardian spoke to him in April, Hooper expected to spend roughly £32 a week of his monthly £325 universal credit payment on energy – almost 40% of his income after housing costs.

After Truss’s announcement, he said: “Whilst I’m very pleased that a lower cap has been introduced, the reality is those on universal credit will be paying twice as much for energy than they did last year, at a time when they’re £85 worse off due to the removal of the uplift.

“My grocery spend is also roughly 40% more, despite statistics suggesting inflation of 10%. I have turned off my hot water, unplugged everything I’m not actively using, completely revised how I cook in order to economise. The ends just don’t meet any more.”

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