Wales’ leading advisory charity is urging the Welsh Government to protect households who have been ‘hardest hit by the pandemic’ from the next rise in energy prices.
Citizens Advice Cymru, which is currently facing record demand for crisis support, responded this week to Chancellor Rishi Sunak’s announcement that there would be a discount on energy bills, which would then be reimbursed to the over the next five years.
Rebecca Woolley, director of Citizens Advice Cymru, warned the measures would only provide ‘temporary relief’ and would not go ‘almost far enough’ for those on the lowest incomes.
Echoing these criticisms, Dame Clare Moriarty, chief executive of Citizens Advice, called the steps taken by the UK Chancellor to help citizens with their energy bills “strange, complicated and unfocused”.
This week, Ofgem, the UK energy regulator, announced a 54% increase in the energy price cap, meaning average bills are expected to reach nearly £2,000, rising to as high as £970 in some areas, with parts of Wales expected to be hardest hit in the UK.
The price cap is updated twice a year and tracks wholesale energy and other costs.
Calling on the Welsh government to intervene, Rebecca Woolley, director of Citizens Advice Cymru, said: “The package announced by the UK government will bring some relief to all households in April, but it does not go far enough for people on low income.
“Energy rebates are a buy-it-now, pay-later solution that only provides temporary relief later this year.”
“And if the proposed council tax cut were similarly introduced in Wales, our analysis suggests that around 230,000 lowest income households may not benefit at all.
“The Welsh Government must step in to ensure that those who have been hardest hit by the pandemic are not left even further behind.”
This week, Dame Clare Moriarty tweeted warning that the price cap announcement is “going to blow people’s finances”.
Today’s price cap announcement is going to blow people’s finances.
Right here @CitizensAdvice we are already seeing families faced with the choice between heating and eating. Disappointed that none of today’s packages target lower income peoplehttps://t.co/2qPFE2quat
— Claire Moriarty (@ClareMoriarty) February 3, 2022
Speaking to Martin Lewis on BBC Radio 4’s The World Tonight, she called for other ways to offer support, saying: ‘For those on low incomes who are hardest hit, the way to get help goes through the benefit system.
“We have mechanisms that will get money to people and can help resolve this situation much more directly and quickly.
“People are already in dire straits and making tough choices between heating and eating.”
Martin Lewis added: “It’s an absolute unprecedented nightmare that we never thought would happen.
“Ofgem is announcing a 54% price cap increase… means, for a typical house, an increase of £700 a year on April 1st, and let’s just remember that lasts six months.
“This is a very significant problem which not only affects the most vulnerable, but extends to low and middle income Britain.
According to ONS figures, the worst affected local authority areas include Ceredigion (£972), Gwynedd (£904), Carmarthenshire (£853) and Powys (£848).
Households on default rates paying by direct debit will see an increase of £693 from £1,277 to £1,971 per year (difference due to rounding), while prepaid customers will see an increase of £708, dropping from £1,309 to £2,017.
This week Rishi Sunak announced a three-part plan, costing over £8.6billion, to help pay household fuel bills
Households will benefit from a one-time reduction of £200 on their energy bills this year, which will be repaid at a rate of £40 per year for the next five years.
Households in England, who are in AD council tax brackets, will also receive a £150 rebate. The Welsh government will receive £175million in Barnett following the announcement.
Welsh Tory leader of Senedd, Andrew RT Davies MS, called for this to be ‘spent immediately to provide households with a tax refund and give all councils in Wales money for discretionary funding to helping families.”
He said: ‘Soaring energy bills are a major concern for hard-working families across Wales and the UK and the Conservative Chancellor has once again taken the lead in helping people in if needed.
“This announcement from Rishi Sunak and the Tories will mean so much to so many people and help them cope with the cost of living this winter, and I implore Labor to use the money wisely and quickly to ease cost pressures of life faced by families across Wales.
Jane Hutt MS, Minister for Social Justice, said: ‘We are doing everything we can to help the people of Wales cope with the cost of living crisis and rising energy bills , including doubling the Winter Fuel Aid payment to £200 and increasing investment. into our discretionary relief fund to assist those in need of urgent and emergency support.
“It is time for the UK government to act to support households and address the turmoil in national energy markets.”
Unite Union said the energy cap hike is a cost of living “catastrophe” for ordinary workers.
Unite General Secretary Sharon Graham said: ‘The energy price cap hike will turn the cost of living crisis into a disaster for millions of people.’
“It will push at least one in four families in Britain into fuel poverty.”
“The policy announced today to provide loans to energy companies to reduce bills, in the short term, is yet another knee-jerk reaction.”
“It fails to address the calamitous increases in customer bills and ultimately means that ordinary families will foot the bill for an energy crisis that is not of their making.”
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