Energy bills will account for up to 10 per cent of the average salary from April, new research from the TUC suggests, as analysts warned that households won’t see the benefit of falling wholesale prices until at least July.
The TUC said its analysis had found that the average energy bill will rise to £250 a month, more than double the amount workers were paying a year ago. The union organisation called on the government to set up a public energy company to lower bills, saying that workers on low pay are being hit the hardest.
A full-time minimum-wage worker will face bills worth 16 per cent of their monthly salary when the price cap is raised in April – up from 8 per cent in March 2022, said the TUC.
It repeated its calls for a higher windfall tax on big oil and gas companies, and urged ministers to end “Britain’s living-standards nightmare”, claiming that the UK energy market has become a “racket”, with oil and gas firms making billions in profits while families struggle to heat their homes.
TUC general secretary Paul Nowak said: “The government must cancel its imminent hike in household energy bills at next month’s budget. Families across Britain are being pushed to the brink by sky-high bills.
“That means imposing a larger windfall tax on greedy oil and gas suppliers, and it means boosting wages across the economy.”
Shadow climate secretary and Labour MP Ed Miliband said: “In a matter of weeks, Rishi Sunak plans to allow the energy price cap to rise to £3,000.
“At the same time, the oil and gas giants rake in the windfalls of war, and Rishi Sunak’s Conservatives refuse to implement a proper windfall tax that would make them pay their fair share.”
He said that Labour would use a “proper windfall tax to stop prices going up in April”.
Meanwhile, analysts on Friday predicted energy bills will rise by an average of £500 a year despite the expected reduction in Ofgem’s price cap on Monday.
The energy regulator is expected to drop its cap on the amount energy suppliers are able to charge by around £1,000 to £3,295, effective from 1 April, according to the latest forecast from Cornwall Insight.
However, customers will pay about 20 per cent more on their bills as the energy price guarantee only partially protects consumers from paying the full price cap.
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “Regrettably, the forecast for April looks set to leave the price cap above the increased energy price guarantee level, meaning average annual consumer bills will effectively jump by 20 per cent (£500).
“However, this is before we take into account the end of the £400 energy rebate scheme in March, meaning that the cost of energy for households will increase by even more.
“While tumbling cap projections are a positive, unfortunately already-stretched households will be seeing little benefit before July.”