Households £3,000 worse off after five years of near-constant cost-of-living crisis

‘After five years of profiting from global turmoil it’s time the banks paid their fair share and helped shield families from soaring bills’

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TUC general secretary Paul Nowak called on the Prime Minister to impose banking taxes to allow Chancellor John Healey to fund targeted energy bill support in his first Budget later this month.

Fuel poverty campaigners yesterday voiced concern over reports that Mr Healey will only add £100 on the Warm Home Discount.

The union federation’s call follows a new study published by the Resolution Foundation today.

It found the high inflation resulting from the pandemic and wars in Ukraine and the Middle East has not been equally shared, with the average household £2,900 worse off should the annual price rises had been at normal levels over this period.

Resolution Foundation chief economist James Smith said: “While the hit to incomes from rising prices has been felt right across the board, the hardship has not been equally shared.

“It is poorer families who have cut back hardest on heating and are falling behind fastest on essential bills, and the conflict in the Middle East is set to keep energy prices high.”

Mr Nowak said: “Household budgets have been hammered by the consequences of Donald Trump’s and Vladimir Putin’s reckless warmongering.

“The government must use this month’s Budget to deliver the circuit breaker the Prime Minister has recognised the country needs

“Working people shouldn’t be left to carry the cost while banks pocket billions from higher interest rates.

“After five years of profiting from global turmoil it’s time the banks paid their fair share and helped shield families from soaring bills.”

Families have responded to the cost-of-living crisis by heating their homes less, with 1.7 million more households saying they were unable to keep warm enough in 2022/23 compared to the previous year, the think tank said.

End Fuel Poverty Coalition co-ordinator Simon Francis said: “The cost-of-living crisis is an energy bills crisis, caused by our exposure to volatile gas prices which are now driving a sixth winter of misery for people who can’t take any more financial hits.

“Targeted help has to reach everyone who needs it. The extra £100 on the Warm Home Discount that the Chancellor is reportedly considering would not even restore the value the scheme once had, and it would miss hundreds of thousands of struggling households who are not on means-tested benefits.”

He urged ministers to at the very least create a referral route so that health professionals, social workers and debt advisers can direct people most in need into additional financial help with their energy costs.

“With the price of gas predicted to pass 10p per kWh from January, the government should also have an emergency heat tariff ready to protect people this winter,” he added.

“Given a handful of energy firms made £6 billion in profit on their UK operations in the first half of this year alone, there is plenty of money in the energy system, just not in the pockets of ordinary people.

“Of course, emergency support can only ever be a sticking plaster. The lasting answer is to get off gas and heating oil by helping households to upgrade the energy efficiency of their homes, reforming electricity pricing and investing in cheaper, homegrown renewables.”

Green MP Hannah Spencer said bills were still going up despite Mr Burnham’s promise of “breathing space,” with predicted increases in January set to be “the final straw for too many people.”

She said: “The Budget will fail families unless we start to see a proper plan to address the cost-of-living crisis.

“This means moving more costs off energy bills, properly funding a national home insulation scheme, clamping down on huge profiteering by energy companies and rapidly scaling up cheaper, cleaner energy.”

Campaign group Positive Money’s Sara Hall blamed the findings on Britain’s exposure to “global shocks from volatile fossil fuel markets… families freezing in cold homes this winter who are paying the price for successive governments’ failure to switch us over to cheap, homegrown renewables quickly enough.

“Continuing to fight this kind of inflation with interest rates is a fool’s errand — they only pile more pressure onto struggling households.

“We need the government to step up and take a more active role in tackling high prices, with measures like rent controls and energy bills support for those on the lowest incomes.”

An HM Treasury spokesperson said: “We know families are feeling the impact of higher prices, pushed up by conflicts overseas.

“The Chancellor is focused on giving households and businesses a bit of breathing space where we can. That’s why we have removed VAT from electricity bills, capped bus fares in England at £2 in 2027, extended the 5p fuel duty cut, and frozen rail fares and prescription charges.”

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