Warnings £150bn cost of living bailout does little for poorest

Anti-poverty campaigners have warned that the government’s energy bill ‘guarantee’, which effectively caps average bills at £2,100 a year for the next two years, doesn’t do enough to target support to the poorest.

Thursday’s announcement could cost £150 billion, and will be accompanied by support for certain sectors of business and industry. It is expected to be funded by borrowing, with the government rejecting calls for additional windfall taxes on energy firms.

But Imran Hussain, director of policy and campaigns at Action for Children, warned: ‘This is a big intervention with a big hole in it. Fixing the cap is welcome and much needed, but the sums still won’t add up for low-income families who despite this help will continue to face bills far beyond what they can afford. This crisis isn’t just about energy; food, fuel and housing costs have also rocketed, forcing many families to ration even the basics.

‘This package should’ve thrown more of a lifeline to the families who need it most. We desperately need more targeted help through benefits for the low paid and those who have lost their jobs or cannot work because of disability, illness or caring responsibilities. Even with a freeze, energy bills will still be double what they were a year ago, the price of other essentials continues to soar, and the true value of benefits has been cut. Low-income families needed help with energy bills but also financial hope for the future if their children are to avoid a bleak Christmas and New Year.’ 

Richard Lane of debt charity StepChange said: ‘The relative relief that households will feel at the news that their immediate energy prices will be capped at current levels can’t mask the fact that many people are already struggling at current prices. For people managing debt, this will impact their ability to address their wider financial problems. We urge the Government to ensure that for targeted households with the least financial resilience – at least those in receipt of means-tested benefits – there should be no future clawback of the support offered now. Benefits should also be uprated this Autumn to help address the wider cost of living pressures that are disproportionately affecting those on low incomes.’

Meanwhile Jonathan Blades of the MS Society, which campaigns for people with Multiple Sclerosis, said: ‘Our new Prime Minister promised to “deliver on energy costs” so it’s a crushing blow to hear she will not deliver for disabled people, including those with MS. While freezing energy costs for a period will go some way to reassure those terrified of eye watering bills, for many people with MS, they were already at breaking point.

‘A freeze of bills today does nothing to help those who were already struggling to pay yesterday. MS is relentless, painful and disabling, and our research has found that a quarter of people living with the condition won’t be able to heat their homes this winter, even with this freeze in place. We also know many are already going without essentials like food, transport and vital medication.

‘We urgently need a new cost of living package that recognises people on benefits and low incomes do not have the resource to weather the storm without sacrificing their health and safety. In the longer term the government must commit to reviewing the rates of benefits to ensure people with MS don’t continue to swing from crisis to crisis. If the Prime Minister is to deliver, she must deliver for us all.’

Photo by Dylan Gillis