Weekly News Review - 18th November 2022
Energy bills to rise to £3,000 a year from April
Chancellor Jeremy Hunt has announced further support for energy costs in his Autumn Statement, though annual bills are set to increase to £3,000 from April. A typical household bill is currently set at £2,500 until the end of March but the increase in gas and electricity prices in the past few months has been reflected in Thursday’s announcement.
Analysis by consultancy Cornwall Insight has found that without the support announced by Mr Hunt average bills would have increased to around £3,740. The Office for National Statistics has also said that without the support the rate of inflation would have been close to 14% instead of 11.1%
Although the typical household will see an annual bill of about £3,000 from April, this does not mean bills will be capped. It is the price per unit of electricity and gas that will be capped so if a household uses more than the average amount of energy then their bills will exceed the £3,000 figure.
The chancellor also announced further cost-of-living payments for the most vulnerable. The payment to low-income households on means-tested benefits is set to increase to £900, which is £250 more than the equivalent payment this winter.
Additional support announced includes £300 for pensioners, £150 for people on disability benefits and £200 for people using heating oil or alternative fuels. Councils will also receive a share of £1bn to help those “who might otherwise fall through the cracks”.
In the Autumn Statement Mr Hunt also extended the windfall tax on oil and gas companies which will see an increase from 25% to 35%, extended for another two years until 2028. An additional 45% tax was also announced on companies generating electricity from older wind and solar farms as well as older nuclear power stations.
Bulb Energy bailout to cost UK taxpayers £6.5bn
Official figures have revealed that the bailout of failed energy supplier Bulb will cost taxpayers £6.5bn. Bulb entered administration in November 2021 and had around 1.5 million customers at the time. A sale with former rival Octopus was agreed last month but the cost of keeping the company in “special administration” for over a year has been passed on to UK households.
Figures released by the Office for Budget Responsibility (OBR) reveal that £4.6bn has been spent dealing with the company in 2022-23. In the OBR’s previous update in March, the bailout cost was estimated to be £1.7bn with an upper forecast of £4bn.
Andy King, of the OBR, said: “The cost of the Bulb intervention has increased essentially because it lasted for more months than factored into the March forecast. The transfer was six months longer and the transfer cost was the remaining part of that.”
The bailout is forecast to add more than £200 on to household bills which is in addition to the near £100 increase which followed the collapse of 28 other energy suppliers since September 2021. It is expected to be the biggest government bailout since the nationalisation of the Royal Bank of Scotland during the financial crisis in 2008.
The shadow climate change secretary, Ed Miliband, said: “The government should hang its head in shame over the Bulb fiasco and the staggering costs it is imposing on the British people of over £200 per household. This is a direct result of a total failure of Conservative government regulation over the past decade and the inexplicable decision not to hedge the soaring energy costs when Bulb went into administration.”
Rachel Rose Jackson from Corporate Accountability said: “COP27 looks like a fossil fuel industry trade show. We’re on a carousel of madness here rather than climate action. The fossil fuel industry, their agenda, it’s deadly. Their motivation is profit and greed. They’re not serious about climate action. They never have been and they never will.”
Next year’s hosts of COP28, the United Arab Emirates, are the largest single delegation this year with over 1,000 in attendance. However, it has been discovered that 70 of these are connected to the fossil fuel industries. There are also 33 oil and gas lobbyists from Russia out of a delegation of 150.
Government approves Sizewell C and plans £6bn to insulate UK houses
In his Autumn Statement, Chancellor Jeremy Hunt has confirmed the Government’s plans to back the Sizewell C nuclear power station as well as announcing a £6bn fund to improve energy efficiency in UK homes. The fund will be used to insulate homes and upgrade boilers between 2025 and 2028 and is in additional to the £6.6bn available during this parliament.
Mr Hunt said: “Over the long term, there is only one way to stop ourselves being at the mercy of international gas prices: energy independence combined with energy efficiency.”
The chancellor said that contracts would be signed in the “coming weeks” with partners in the project, which includes French energy firm EDF. The £30bn project had originally been approved by Boris Johnson shortly before the end of his leadership. However, speculation around Mr Hunt’s planned tax rises and spending cuts had cast doubt over the power station’s future.
Mr Hunt said: “Britain is a global leader in renewable energy” but stated “we need to go further, with a major acceleration of home-grown technologies like offshore wind, carbon capture and storage, and, above all, nuclear”.
The chancellor added: “This will deliver new jobs, industries, and export opportunities and secure the clean, affordable energy we need to power our future economy and reach net zero by 2050. So I can today announce that the Government will proceed with the new nuclear plant at Sizewell C.”
However, campaign group Stop Sizewell C said: “If the Chancellor is looking for cheap, reliable, energy independence, he is backing the wrong project, as Sizewell C’s ultimate cost and technical reliability are very uncertain and building it is reliant on French state-owned EDF.”
“Greenlighting Sizewell C also loads more tax onto struggling households, who would be forced to pay a nuclear levy on bills for a decade before they could light a single lightbulb.”
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