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TUC - Ofgem cap and OBR: energy bills to rise 23 times faster than wages and 38 times faster than benefits

After more bad news for families yesterday (Tuesday) on the cost of living, the TUC has called on the government to urgently come forward with an emergency budget.

Ofgem price cap rise

The energy regulator Ofgem has written to the Chancellor to inform him the energy price cap will rise from £1,971 to around £2,800 in October – a rise of more than £800.

It will mean that energy prices this year are rising 23 times faster than wages, and 38 times faster than benefits.

Benefits plummet in value

The Office for Budget Responsibility has announced that the main benefits that support working age households will plummet in value this year by at least 6-7%, and up to 8% based on the Bank of England’s inflation forecast, in part driven by soaring energy prices.

This includes universal credit, child benefit and legacy benefits for unemployment, sickness and incapacity.

TUC General Secretary Frances O’Grady said:

"Millions of families are already at breaking point. But now they face even more bill hikes, while ministers do nothing to make sure wages and universal credit keep pace.

“The Chancellor must provide more help to families now. We need an emergency budget – it’s time to get on with it.

“The best way to get cash to low and middle-income families fast is through a big boost to universal credit. And we need a major programme of energy grants to cut bills – funded through a windfall tax on the profits of energy companies.”

The TUC says ministers should:

  • Impose a windfall tax on oil and gas profits to fund energy grants
  • Boost the minimum wage, pensions and universal credit
  • Work with unions and employers to get pay rising across the economy

Editors note

- Rate of energy price cap rise compared to wages and benefits

 

Wages (£)

Energy cap (£)

Monthly UC payment (£)

Dec-21

553

1277

324.84

Dec-22

581

2800

334.91

Change on year

5.2%

119%

3.1%

 

Wages

 

UC

Times faster than energy rises

x23

 

x38

Original article link: https://www.tuc.org.uk/news/ofgem-cap-and-obr-energy-bills-rise-23-times-faster-wages-and-38-times-faster-benefits

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