Rishi Sunak is under intense pressure to do more to ease the cost of living as families brace for a £1,600 hit this month.
Tory MPs and campaigners urged the Chancellor to revisit last week’s mini-Budget to help millions facing an unprecedented hike in everyday costs.
An unprecedented rise in energy bills marks the beginning of a year filled with economic misery for millions.
The energy price cap will jump from £1,277 to £1,971 – an increase of £693 – with official forecasts suggesting it will increase by a further £788 in October.
An independent assessment for the Daily Mail found that price rises and tax hikes this month alone will cost a typical family of four over £134 a month – equal to more than £1,612 a year.
Millions are facing economic hardship due to record-breaking energy bill increases
Websites of Energy companies crashed as customers who were struggling to register meters for the big rise yesterday tried to log in.
Next week, the Chancellor’s controversial hike in national insurance contributions will kick in, costing someone earning £30,000 an extra £255.
On average, council tax bills have increased by 3.5 percent. In addition, the hospitality sector cautioned that the increase in VAT from its pre-pandemic level would further push up inflation rates. They are currently forecast to reach 9%.
Hospitality firms warned price rises in pubs and restaurants are ‘inevitable’ from today when the reduced rate of VAT on the sector goes up from 12.5 per cent to its pre-pandemic level of 20 per cent.
Former minister Robert Halfon said that while the Chancellor had already moved to help by means of measures such as last week’s 5p cut in fuel duty, the scale of the crisis meant he would have to get his chequebook out again.
OBR warned families that they face the greatest squeeze in living standards since the 1950s when the records started.
The triple lock, which was temporarily suspended in Covid, is also causing problems for pensioners.
Mr Halfon, Conservative MP for Harlow, in Essex, urged the Prime Minister to use next week’s energy strategy to take VAT and ‘green tariffs’ off energy bills, a move which he said could reduce them by hundreds of pounds.
He said: ‘I welcome the action the Government has taken but we will have to go further, particularly on energy bills.’
Former Cabinet minister John Redwood also urged the Chancellor to ‘do more’ to help struggling families – including ditching the NI hike and VAT on domestic fuel.
‘More action is needed now to see off the hit to real incomes in April and May, rather than pausing to see what happens in the autumn,’ he said.
Mr Sunak has already unveiled some measures to help, including a £200 loan to assist with energy bills, which comes through in October, and a massive rise in the threshold for paying national insurance, which will leave most workers better off when it comes into force in July.
Next week, the Chancellor’s controversial hike in national insurance contributions will kick in, costing someone earning £30,000 an extra £255
Millions of households living in homes rated council tax bands A to D will also benefit from a one-off discount worth £150.
Yesterday the Chancellor acknowledged that many families would find the coming months ‘tough’ – and admitted that his decisions to raise taxes were ‘certainly unpopular’.
But he suggested that the Government’s towering debts left him with little room to do more. He said: ‘We’re facing a very difficult situation with the price of things going up and I want to do what we can to ameliorate some of that, but I’m also honest with people that we can’t ameliorate all of it, sadly.’
Downing Street did not rule out a possibility for a second package of assistance.
The Prime Minister’s official spokesman said the Government had put in place support worth £22billion. He added that the Government cannot do ‘absolutely everything to cover off some of these pressures that we are seeing globally’.
However, he stated that ministers will continue to review the situation. He said: ‘We are ready to take further steps if needed to support households’.
Labour yesterday put the cost of living at the centre of its campaign for next month’s local elections. Launching the party’s campaign in Bury yesterday, Sir Keir Starmer branded the package of help ‘pathetic’ and called for a windfall tax on energy firms, which he said could knock £600 off average bills.
Senior Tories also fear the cost of living could dent the party’s hopes in next month’s elections.
Conservative backbencher Craig Mackinlay said he ‘fears for the May elections’ because of the cost of living crisis.
He told the Mail: ‘It’s not a great place to be politically when all these bills arrive in April.’
A Mail survey on rising costs found that many households are facing a difficult financial year.
National Energy Action, a charity that fights fuel poverty, warned that heating an average house has doubled over the past 18 months. This means that 6.5 million people are unable to afford a safe and warm home in the UK.
In the meter-reading rush, energy supplier websites crashed
Helena Kelly, Money Mail Reporter
The websites of energy suppliers crashed yesterday as thousands of customers rushed to submit meter readings ahead of today’s price hike.
Households couldn’t log in online due to glitches at British Gas, E.On, and Scottish Power. Callers were left waiting for long periods of time.
It came as consumer champion Martin Lewis urged households to submit photographs of their meters to suppliers for what he called ‘meter reading day’.
Yesterday saw thousands of people rush to submit meters readings and crashed the websites of all energy suppliers
But providers provoked further outrage when they appeared to blame Mr Lewis for the delays, with E.On accusing him of ‘bringing down Britain’.
Annual energy bills will soar by 54 per cent today as regulator Ofgem raises the price cap for an average home to £1,971.
To show how much energy they used, households were asked to provide evidence from their meters before midnight on last night.
This should prevent firms from estimating a customer’s energy usage before April 1 and potentially overcharging them at the new higher rate.
The guidance only applies to traditional meters rather than ‘smart’ ones, which automatically send data to suppliers.
A tweet by E.On’s official account read: ‘Unfortunately the website and phone lines of every supplier are being hammered today. Martin has once again created an unprecedented demand bringing down Britain.’ The tweet was swiftly deleted, with the firm admitting it was an ‘ill-considered and off-the-cuff remark’. Octopus said: ‘Martin Lewis’ advice for customers to submit meter readings has driven incredible traffic.’
Consumer champion Martin Lewis urged households to submit photographs of their meters to suppliers for what he called ‘meter reading day’
E.ON Next replied to customer in a tweet that was deleted. It claimed Martin Lewis had ‘once more created an unprecedented demand, which brought down Britain’
Mr Lewis appeared to laugh off the barbs, saying he thought the E.On tweet was ‘someone trying to be funny’. He added: ‘I’m always forgiving of human error (as I make them myself) so let’s move on.’
Most energy suppliers stated that their websites were having problems yesterday. Many were up and running by the end of last night. One British Gas customer wrote on Twitter: ‘This isn’t good enough! How about investing some of those obscene profits in a decent IT system?’
Political leaders also attacked the suppliers and said they shouldn’t have been surprised by an increase in web traffic. Ed Miliband, Labour’s climate change spokesman, said suppliers had ‘serious questions to answer’. Energy bosses advised customers to not panic last night. Octopus chief executive Greg Jackson said readings could be emailed or phoned in over the next ‘five to seven days’.
Scott Byrom, of The Energy Shop, said: ‘Even if you didn’t manage to get a photo yesterday and take one today, the difference in cost will be pennies.’ Trade body Energy UK said customers could use automated phonelines and apps to make contact.