Martin Lewis Warns "Lives Will Be Lost" As Energy Price Cap Passes £3,500
"Lives will be lost this winter" if the government does not intervene on energy bills, Martin Lewis has said (Alamy)
“Lives will be lost this winter” if the government does not intervene and provide more support for households with their energy bills, financial expert Martin Lewis has said, as the domestic price cap was confirmed as £3,549 from October.
Energy regulator Ofgem announced the new price cap on Friday morning. It will take effect on October 1, and marks a record 80% increase on the cap of £1,971 that has been in place since April.
Further price hikes are expected in January and April when the price cap will be reviewed again, as per regulator Ofgem’s rules.
Lewis described the country as being in “an absolutely horrendous situation and it is going to get even worse” in the New Year.
“I've been accused of catastrophising over this situation," he told BBC Radio 4’s Today Programme.
“The reason I have catastrophised is this is a catastrophe, plain and simple unaffordable. And let's just amplify what the boss of Ofgem said earlier. He effectively said – in the polite way that a regulator does – ‘this is out of our hands, it is beyond our power, we need government intervention’. And we do."
The government has been under pressure to introduce measures to alleviate the unprecedented price rise throughout the summer, but has insisted no steps will be considered until a new prime minister enters office on 5 September.
“If we do not get further government intervention, on top of what was announced in May, then lives will be lost this winter by too many people to think about because of these unaffordable terrible, rises in energy bills,” Lewis added.
Soaring wholesale gas costs are behind the increase, triggered by Russia’s invasion of Ukraine earlier this year.
Following Ofgem's announcement, chancellor Nadhim Zahawi insisted that "help is coming", but was unable to confirm specific detail.
“While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support,” he said in a statement.
The issue has been a key topic in the Conservative leadership contest, with both Rishi Sunak and Liz Truss pushed to give more detail on support they would put in place if they move into Number 10.
Sunak pledged that he would provide more direct help to vulnerable people and has also advocated for a “programme of massive energy efficiency upgrades”.
While Foreign Secretary Truss, who is frontrunner to become the next prime minister, has already suggested she would consider announcing some additional support packages to provide immediate relief, she is more in favour of offering tax cuts rather than offering what she has described as "handouts".
Ofgem’s chief executive Jonathan Brearley described the news of the new price cap as “devastating for many families” and said that the regulator wants “to work with a new government to make sure we can address this and look after customers this winter”.
When pushed on whether he had seen a plan to help consumers in the coming months, he told BBC Breakfast: “It's not our job to tell politicians what to do, but it is our job to advise the government.
“So we are working flat out with the officials in government to make sure there are clear choices and recommendations for the new administration that comes in in 10 days time."
A campaign spokesperson for Truss said: “Today’s announcement will cause grave concern to many people across the UK who will be worried about paying their bills. As Prime Minister, Liz would ensure people get the support needed to get through these tough times.
“She will immediately take action to put more money back in people’s pockets by cutting taxes and suspending green energy tariffs.
“This is on top of ongoing work such as the Energy Bills Support Scheme, which will see a £400 discount paid to consumers from October, and the £1,200 package of support for the most vulnerable.
“Liz will work flat out to deliver long term energy affordability and security, unleashing more energy by maximising our North Sea oil and gas production - helping keep bills down in the future.”
A Government spokesperson said: “Direct support will continue to reach people’s pockets in the weeks and months ahead, targeted at those who need it most like low-income households, pensioners, and those with disabilities.
“As part of our £37 billion package of help for households, one in four of all UK households will see £1,200 extra support, provided in installments across the year, and everyone will receive a £400 discount on their energy bills over winter.
“The civil service is also making the appropriate preparations in order to ensure that any additional support or commitments on cost of living can be delivered as quickly as possible when the new Prime Minister is in place.”
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