Tag: cost ofliving crisis

‘Decisive action’ to break influence of gas on electricity prices

Families across the country will be better protected from energy crises, as government moves to break link between gas and electricity prices

  • Families across the country will be better protected from energy crises, as government moves to break link between gas and electricity prices
  • New plans include long‑term fixed‑price contracts for renewables, protecting families when gas prices spike
  • Immediate action to tax excess profits through the Electricity Generator Levy by raising the rate from 45% to 55%, ensuring an increased proportion of the extraordinary revenue generated when the gas price spikes is available to government to support businesses and households with the cost-of-living
  • Comes as government doubles down on drive for clean, homegrown power with raft of measures to unlock public land, speed up planning and cut bills for families

Plans to better protect families and businesses by ending the unfair way international gas prices push up electricity prices across Great Britain take a major step forward today.

Instability in the Middle East has shown that Britain’s reliance on international fossil fuel markets leaves families and businesses exposed to volatile gas prices, driving the cost-of-living crisis even though much of the country’s electricity comes from cheaper renewables and nuclear. 

When wars, geopolitical tensions or supply shocks abroad push up global gas prices, electricity bills rise with them, exposing families to crises they have no control over. 

Over time, this problem is easing as new clean energy projects are built on fixed price contracts that protect consumers from gas price volatility. But a significant share of renewable generation – about 30% of Britain’s power supply – is still exposed to wholesale prices set by gas, leaving families vulnerable when international prices rise.

Therefore, to shield families from future crises, today the government is setting out new measures to ‘break the link’, reducing the impact that volatile gas prices have on the price of electricity. This will be done by:

  • Voluntary long term fixed contracts: offered to existing low-carbon generators not on fixed‑price contracts – covering around a third of Britain’s power supply. This will help protect families and businesses from higher bills when gas prices spike, with contracts offered only where they deliver clear value for money for consumers
  • An updated Electricity Generators Levy: immediate action to tax excess profits through the Electricity Generator Levy by raising the rate from 45% to 55%, ensuring an increased proportion of the extraordinary revenues generated when the gas price spikes is available to government to support businesses and households with the impacts of the conflict in the Middle East on the cost of living

Measures announced today will further reduce the share of electricity exposed to gas price shocks and provide generators the economic incentive to move on to fixed contracts not linked to volatile gas. The government is monitoring the impact of the current crisis on energy bills and will be ready to step in to provide targeted support where necessary.

Britain has already moved from gas setting the price of electricity around 90% of the time in the early 2020s, to around 60% today. Through the government’s clean energy mission, it is estimated gas will set the wholesale price around half of the time by 2030.

Prime Minister Keir Starmer said: “We need to get off the fossil fuel rollercoaster – this will make energy bills more stable and take the pressure off family budgets.

“When global gas prices spike, people here shouldn’t be picking up the tab.

“Our focus is simple: easing pressure on household budgets now, while building a homegrown energy system that protects families from global instability in the years ahead.”

Energy Secretary Ed Miliband said: “As we face the second fossil fuel shock in less than 5 years, the lesson for our country is clear: The era of fossil fuel security is over, and the era of clean energy security must come of age.

“That’s why we’re doubling down on clean power, to give our country energy security and bring down bills for good.”

Chancellor Rachel Reeves said: “Hardworking British families and businesses should not bear the brunt of global gas price shocks while electricity generators are making exceptional profits.

“Alongside moving generators onto the competitive pricing assured through wholesale Contracts for Difference, increasing the EGL to 55% will help to break the link between high gas prices and high electricity prices – offering households and businesses stronger protection against future energy shocks.”

Further measures

Speaking today at the Good Growth Foundation, the Energy Secretary set out further measures to help cut bills for families and deliver more clean, homegrown power:

Bigger grants for households on heating oil and LPG

The crisis in the Middle East has impacted those on heating oil and LPG the hardest. The government is today announcing an increase to the Boiler Upgrade Scheme (BUS) grant for properties heated by oil and LPG, taking the total grant to £9,000. This will help those households and small businesses in England and Wales most impacted by rising energy prices, particularly in rural areas, to electrify their heating and provide greater certainty over energy bills.

Further details on Transitional Energy Certificates 

Today in advance of legislation, we are publishing further details on Transitional Energy Certificates to provide greater certainty and clarity for industry looking to invest in already-explored areas near existing licensed fields, supporting a fair and managed transition.

Faster upgrades for social housing 

The government is already investing £1.2 billion to upgrade 100,000 social homes over the next 2 years. To accelerate further, the government is today providing an additional £100 million of funding for the Social Housing Fund, subject to final approvals, to support the delivery of up to a total of 57,000 solar installations for households this financial year. Through the Social Housing Fund and social housing regulations in the ‘Warm Homes Plan’, this will help households cut bills by hundreds of pounds and support up to a million homes reach EPC C.

Solar panels for schools and colleges 

Building on the success of Great British Energy’s solar scheme, the government is backing the company to extend support for more rooftop solar installations on a further 100 schools and colleges this year.  Up to £40 million of government investment, subject to final approvals, Great British Energy will deliver new rooftop solar and renewable schemes – helping the public sector cut energy costs and reinvest savings. 

Public land 

Driving forward plans to massively expand renewables across the Public Estate – including using brownfield land, industrial sites and railway sites to host solar panels and wind turbines. This could unlock up to 10 GW of capacity, even using only a fraction of government land, powering the equivalent of around 5 million homes.

Planning and land rules

Streamlining outdated rules to unblock the grid and speed up clean, homegrown power, through the biggest overhaul of planning, land access and grid connection processes since the start of the government’s clean energy mission — cutting delays for essential grid upgrades and renewables, and exploring new routes for developers to build and connect their projects faster. 

EVs, heat pumps and solar 

Plans to make it easier for people to switch to cheaper electric transport and heating, by making EV chargers, solar panels and heat pumps easier to install for renters, flat-dwellers and households without a driveway.  

The government is exploring ways to ensure that low-income households can benefit from plug-in solar through our ‘Warm Homes Plan’ this year, and have earmarked up to £25 million with a view to piloting support for plug-in panels in partnership with local authorities and mayors: our vision is a street by street approach where tens of thousands of low-cost solar panels are delivered to those most in need.

Reformed National Pricing

Households and businesses will benefit from a cheaper, more efficient energy system through a new Reformed National Pricing Delivery Plan. The delivery plan shows how smarter planning and faster delivery of electricity infrastructure could unlock up to £20 billion in benefits between 2030 and 2050.

Trussell Trust: 1.3 million emergency parcels provided in last 6 months

  • New figures from the Trussell Trust show more emergency food parcels were given out during the April to September period than ever before
  • Over the last six months, 320,000 people have been forced to turn to food bank in the Trussell Trust network for first time
  • New research finds one in five people referred to food bank in the Trussell Trust network are in working households
  • The charity is urging the UK government to take immediate action as food banks face ‘breaking point’
  • Volunteers set for busiest winter yet as levels of need outstrip donations 

New figures released today by the Trussell Trust reveal that 1.3m emergency food parcels were provided to people between April and September this year by food banks in the charity’s UK network and almost half a million of these went to children.

That’s a third more than were provided during the same period in 2021 and an increase of more than 50% compared to pre-pandemic levels.  

The Trussell Trust, which supports more than 1,300 food bank centres, says the cost of living emergency has created a ‘tsunami of need’, as people struggle to survive amidst the soaring costs of living.  

With need outstripping donations for the first time in its history, the charity has been forced to launch an emergency appeal to ensure that food banks can meet the alarming level of need in their communities.   

In the first half of this financial year alone, the Trussell Trust’s food bank network provided more parcels than in a full 12-month period five years ago, when 1.2 million emergency food parcels were distributed.

Over the last six months, 320,000 people have been forced to turn to a food bank in the Trussell Trust network for the first time which represents a 40% increase compared to 2021. 

The charity warns that food banks are at ‘breaking point’, both physically and mentally, and are set to face the hardest winter yet as they expect to provide more than 7,000 emergency food parcels a day on average in the next six months.  

Josie Barlow, food bank manager at Bradford Foodbank said: “Someone who came to the food bank recently told me that ‘buying milk is a luxury now’. So many people are struggling with bills and food prices. We are fortunate to be able to help people and we work hard to support them in both the short and long term, but we are also facing challenges.

“We have seen a huge increase in people coming to the food bank in the last two months compared to the same period last year and our stock levels are very low for this time of the year.” 

Furthermore, new research to be released by the charity next year, finds that one in five people referred to a food bank in the Trussell Trust network are in working households.

The charity is supporting more and more people who are working but still can’t afford the essentials which is leading to food banks having to change their opening times to make sure working people can pick up their parcels outside of work hours.  

The Trussell Trust is calling on the UK government to act decisively in next week’s Budget.

Over the last few years, the charity’s network of food banks has seen how the right support, at the right time, can help people out of hardship.

Most recently, the government’s targeted support to people on the lowest incomes via July’s Cost of Living Payment correlated with a small dip in need at food banks.

However, the charity warns that short-term interventions are neither sustainable for government nor dignified for people who are struggling, and they don’t solve the longer-term problem of people having to rely on food banks. 

Emma Revie, chief executive at the Trussell Trust, said:  “These new statistics show that, even in summer months, people are struggling to afford the essentials and we are expecting that this winter will be the hardest yet for food banks and the people they support. This is not right. 

“We know that with the right support and a stable and sufficient income, people don’t need to turn to food banks for support.

“Over the last few years, the government has acted to protect people who are struggling, and this action has had made a difference. They must now act again: with swift support now to help people through the winter, and with vision for the longer-term to ensure that social security is always enough to weather challenging times. 

“We are calling for the Prime Minister to act decisively in next week’s budget.

“We urge the UK government to realise their commitment of supporting people on the lowest income with a broad package of support. As well as ensuring that benefits rise with inflation as soon as possible, this must go further to close the gap between price rises and incomes over the winter.”

Read more about these figures

If you are in a position to donate, you can support the Trussell Trust’s Emergency Appeal Fund now by donating vital funds to help the charity support food banks this winter. 

Visit trusselltrust.org/appeal.