Energy bills are set to rise at least 14 times faster than wages this year, new research suggests. The TUC union federation said its analysis showed that gas and electricity bills are on course to increase by 54 percent when the price cap set by Ofgem changes in April. But average weekly wages will go up by 3.75 percent.
That’s less than half the rate of inflation using the more accurate RPI measure. The TUC says those on low incomes will be hit hardest by higher bills, as years of weak wage growth and benefit cuts have left working families “badly exposed” to the cost of living crisis. The TUC estimated that since 2010 energy bills have risen at twice the speed of average wages.
Another set of figures from Aurora Energy Research, a consultancy, says British households face a £38 billion hit to their budgets from an expected doubling in electricity and gas bills.
The cost of heating and lighting homes in 2022-23 will be the equivalent of a 6p rise in the basic rate of income tax. It will mean an epidemic of poverty. And according to economists at Investec and Goldman Sachs, most of Britain’s 28.5 million households are due to see their annual energy bills exceed £3,000 after the next rise in October.
The Tories have offered only the most meagre measures in response. Multi-millionaire chancellor Rishi Sunak has promised a compulsory £200 loan—not a grant—to households to be issued in October. It will then have to be repiad over the subsequent four years. That won’t reduce by a penny the amount people are asked to pay in total.
There will also be a £150 rebate on council tax bills for those in property bands A to D. But many renters won’t see a penny of that while they are still expected to pay outrageous amounts for energy.
TUC general secretary Frances O’Grady said, “Years of wage stagnation and cuts to social security have left millions badly exposed to sky-high bills. With households across Britain pushed to the brink, the government must do far more to help workers with crippling energy costs.
“That means imposing a windfall tax on oil and gas profits and using the money raised to give hard-pressed families energy grants, not loans. It means a real increase to Universal Credit to stop low-income workers from being pushed into poverty.”
But the government has no intention of helping out ordinary people or boosting wages, benefits and pensions. When Sunak unveils his spring statement on 23 March, the priority will be money for war, not the working class. There will undoubtedly be some moves designed to camouflage the central policy, but there will be no real shift to freeze fuel bills, control prices, or take the industry back from privatised firms.
A glimpse of ruling class opinion comes from Allister Heath, editor of The Sunday Telegraph newspaper. He wrote last weekend, “The greatest immediate change will need to come in defence expenditure.
“We will require a sensible energy policy: like in the 1970s, we have been caught out, this time by our idiotic decision, driven by green zealots, to shut down domestic production of oil and gas.”
Heath added, “The post-Blairite era of social-democratic largesse must end: the state needs to refocus on its core function of defending lives, liberty and property. We require less redistribution, and enhanced resilience. This implies large spending cuts.”
These are the main voices Sunak listens to. The only effective reply will be class struggle. O’Grady recently visited the Wincanton B&Q workers in Worksop who fought an 11-week strike and eventually won a far bigger pay rise than they had been offered. Yet union leaders are not focused on this sort of resistance or delivering solidarity for it.
Strikes can get results—this is the path that has to be followed. It means a big shift by the unions from preaching “national unity” and bemoaning the Tory failures towards encouraging and building struggle.
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