Rishi Sunak’s energy crisis ‘bailout’ derided as ‘hopelessly inadequate’

The chancellor’s support to the ‘Black Thursday’ energy rise has been met with contempt, with unions warning the increase is a cost-of-living ‘catastrophe’ for ordinary workers.

Rishi Sunak

On February 3, energy regulator Ofgem announced that the price cap on energy bills – which places a limit on what providers can charge consumers – is to rise by 54%. As of April 1, bills will thereby increase from £1,277 annually to £1,971.

As energy bills are set to skyrocket by almost £700, millions will be plunged into fuel poverty as the crisis will become catastrophic, Sharon Graham, general secretary of Unite has warned.

In response to Ofgem’s announcement, Graham said the “energy price cap rise will turn the cost-of-living crisis into a catastrophe for millions of people” and will “plunge at least one in four families in Britain into fuel poverty.”

A ‘knee-jerk reaction’

Graham described the price cap increase as another “knee-jerk reaction.”

“It fails to address the calamitous increases coming in customer bills and ultimately means ordinary families will foot the bill for an energy crisis not of their making.”

As the backlash of ‘Black Thursday’s blow snowballed, the chancellor attempted to offer some respite, announcing all households will receive £200 off their energy bills.

Though there is a catch.

Consumers will have to pay back the ‘loan’ at a rate of £40 a year over five years from 2023. The loaned discount will not even arrive until the autumn, when, the chancellor warns, energy bills will go up again.

Another measure in the bid to help households, is a warm home discount scheme, which offers a £140 discount to claimants of certain benefits during the winter, and a council tax rebate, in which council taxpayers in bands A – D will receive a £150 refund in April, the same time as council tax bills are due to rise.

‘Hopelessly inadequate’

The measures have been derided as not going far enough. As Unite’s Sharon Graham notes:

“Given that taxpayers’ money is paying for the bail-out, these loans must come with substantial strings attached, including guarantees that jobs will not be lost. Otherwise, they will just vanish into big corporate energy balance sheets.

“Without government investment in sustainable domestic sources, such as new nuclear and renewables, the UK public, as well as the economy, will continue to be at the mercy of unstable energy markets.”

Frances O’Grady, leader of the TUC, expressed similar concerns, saying that the government’s plan is “hopelessly inadequate” and “for most families it’s just £7 a week and more than half to be paid back. The best way to help families is to get wages growing again.”

Even the Sun attacks the measures

Even the Tory-loving Sun derided Sunak’s bills ‘bailout’. Though the Sun’s solution to the crisis is to lower taxes, writing: “It is dispiriting, though, to see a Tory Government with a huge majority shun the far more effective and more Conservative solution . . . tax cuts, to ease hardship and grow the economy.”

Labour has naturally lambasted Sunak’s ‘fix’. Shadow chancellor Rachel Reeves said: “The Chancellor wants to load costs on taxpayers with a ‘buy now, pay later’ scheme while Labour will keep bills low with a windfall tax on North Sea oil and gas producers with booming profits.

 “The government’s proposals will leave families in Britain paying hundreds of pounds more as a result of the breath-taking rise in energy prices.

“Labour would raise money to keep bills low through a one-off windfall tax on oil and gas profits, to support all households, with each typically getting £200 of their bills.

“Labour’s plan will get £600 to the lowest income households, while the Conservatives will only give £350,” Reeves continued.

Gabrielle Pickard-Whitehead is a contributing editor to Left Foot Forward

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