The energy price cap announcement means bills for the average customer on a default tariff will rocket from £1,277 to £1,971 from April.
An eye-watering £693 rise to the average household’s yearly energy bill could not come at a worse time. It will pile more pressure on already stretched household budgets.
This nightmare financial squeeze is down to 12 years of Conservative mismanagement that has left us exposed to the global surge in gas prices.
Ministers did nothing while our gas storage levels were cut to tiny levels compared to other European countries. That’s why we are so reliant now on supplies from Russia and Qatar.
The Government has dithered for years when it should have been working hard to build up a supply of renewable and nuclear energy.
Their incompetence in failing to regulate the energy market has been matched by the painfully slow progress on making sure homes are properly insulated to help cut domestic fuel costs.
Contrast the extra burden facing UK energy customers with the profits being made right now by oil and gas producers. Only this week, Shell revealed its profits had quadrupled to $20bn and described its results as “momentous”.
There is a choice for the government here. I have been calling on them to cut VAT on domestic fuel bills and back the rest of Labour’s plan to save most £200 on their bills. Crucially, our package would also target extra help to those in greatest need like pensioners and low earners, giving those households an extra £400 – saving them £600 in total.
And, we would pay for these proposals through a one-off windfall tax on the profits of North Sea oil and gas producers.
Our Climate Investment Pledge would insulate homes, invest in renewables and nuclear and fix our broken energy system. These are the bold plans that offers the kind of security and real financial help that families need.
By contrast, Chancellor’s Rishi Sunak’s announcement on fuel bills is just a buy now and pay later scheme that cuts some money off bills now only to slap the charge back on in future years.
In addition to overseeing spiralling fuel bills and a predicted inflation rate of seven per cent, the Government is breaking a manifesto promise with its £12bn National Insurance hike – the equivalent of 10 per cent increase in deductions from workers’ pay from April.
The Resolution Foundation has estimated families now face a typical hit to their income of £1,200 from April due to tax and fuel bill rises. It’s a cost of living crisis created by the Conservatives.
Yet, while taking the hard-earned cash of working people, Boris Johnson’s government are simultaneously throwing away billions on fraud, waste, cronyism and vanity projects.
We face the highest tax burden for 70 years under this high tax and low growth Government. However, Chancellor Rishi Sunak thinks it’s fine to write off £4.3bn of taxpayers’ cash dished out in Covid support schemes to fraudsters.
Another £13bn has been frittered away on botched defence projects and £8.7bn wasted on personal protective equipment that was faulty or past its sell-by date.
Unbelievably, the Government handed out lump sums of £50,000 in Covid support schemes to businesses that were not even trading at the start of the pandemic. They failed to ensure that even the most basic of checks were carried out.
Such woeful shortcomings are an insult to businesses in my constituency of Leeds West and elsewhere that were shut out of Government support schemes.
These inexcusable failures opened the door to criminals who created bogus companies to siphon off public money – despite repeated warnings to ministers about the risk of fraud.
That’s why I led a debate in Parliament to urge the PM to allow the National Crime Agency to investigate all aspects of fraud in the Government’s Covid support schemes. This toxic mix of incompetence, waste and poor management that we see from Johnson and his government has destroyed any hopes they had of winning public trust.
We can see that with his ever changing story about his role in the Downing Street parties scandal that has seen him now embroiled in a police investigation. People are turning to the Government for support to get them through this cost of living crisis, yet the Conservatives are too busy plotting whether to sack or save their embarrassment of a leader to come up with the solutions that people need.
They are more concerned about shielding oil and gas producers who have had a booming year than helping ordinary people.
Labour has a plan to tackle the cost of living crisis so people and communities can thrive.
We have a costed plan to deal with soaring fuel bills and would put a stop to this Government’s waste and incompetence.
A Labour government would end the Conservatives’ dismal record of low growth and high taxes to turbo charge our economy and spread prosperity.
Rachel Reeves is the Shadow Chancellor and Labour MP for Leeds West.
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