British households were on Friday bracing for a bleak winter as regulators announced an 80 per cent leap in energy bills in what they acknowledged was “devastating news”.
Regulator Ofgem said a gas squeeze blamed on Russia meant it had no choice but to raise the price cap, but called on Britain’s next prime minister to “act urgently” to ease the pain.
Ministers were warned of a consumer revolt if they did not increase support for households, with Ofgem telling households that things could get “significantly worse” in 2023.
Bills for a typical household will rise to the equivalent of £3,549 ($4,186) a year from October, up from £1,971.
Analysts at Cornwall Insight, who correctly predicted the jump, said another steep rise to £5,386 was on the cards when the price cap is next updated in January.
Boris Johnson, the departing prime minister, is tied by a pledge not to make major decision before he steps down but said on Friday the next government should "target" the most vulnerable households with support on energy bills, not cap overall rates.
The pressure on the new leader, due to be named on September 5, is for a significant support package. "It’s clear the new prime minister will need to act further to tackle the impact of the price rises that are coming,” said Jonathan Brearley, chief executive of Ofgem. “The response will need to match the scale of the crisis we have before us."
Plans to deal with the cost-of-living crisis are the key dividing line in the Conservative leadership contest, with Liz Truss favouring tax cuts while Rishi Sunak calls for more direct support.
Ms Truss, the favourite to assume power on September 6, said she would “ensure people get the support needed” — without offering new commitments beyond the £15 billion package announced by the government in May.
Allies of Ms Truss said she could not make further spending promises until she had “seen all the facts” but that “people can trust” that she would make energy bills affordable.
Conservatives on the campaign trail - in pictures
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Candidates Rishi Sunak and Liz Truss at the Conservative Party leadership election hustings at Wembley Arena, London. This was the final hustings attended by Tory Party members who will vote for the new leader and next prime minister. EPA -
Liz Truss addresses Conservative Party members at Wembley Arena. AP -
Mr Sunak puts forward his case to be leader while speaking at Wembley Arena. Bloomberg -
Mr Sunak visits his family's old business, Bassett Pharmacy in Southampton, while on the campaign trail. Reuters -
Ms Truss speaks to staff at Condimentum Ltd at the Food Enterprise Park in Norwich. Getty Images -
A Rishi Sunak supporter at a hustings event in Norfolk. PA -
Mr Sunak greets people at a leadership hustings in Manchester. Bloomberg -
Ms Truss poses for a selfie with a supporter as she arrives for the event in Manchester. Getty -
Rishi Sunak looks through the sights of an anti-tank missile launcher, supplied to Ukraine, during a visit to the Thales Defence System plant in Belfast, Northern Ireland. AP -
Liz Truss at a Conservative Party leadership campaign event in Belfast. Getty -
Liz Truss meets supporters before a hustings in Perth, Scotland. Getty -
Rishi Sunak speaks during a campaign visit to Cluny Castle in Inverurie, Scotland. Getty -
Police hold back protesters outside Perth Concert Hall, Scotland, where Conservative leadership candidates Liz Truss and Rishi Sunak were speaking. PA -
A mural showing the two leadership contestants appears on a wall in Belfast, Northern Ireland. AP -
Rishi Sunak during a visit to St John's Wood Synagogue, north London. PA -
Liz Truss at the Conservative Party leadership election hustings in Cheltenham. EPA -
Rishi Sunak during a hustings event in Cheltenham. Reuters -
Liz Truss speaks to scientists during a campaign visit to a life sciences laboratory at Alderley Park in Manchester. PA -
Rishi Sunak during a campaign hustings in Darlington, England. Bloomberg -
Liz Truss meets party members before she speaks at the Darlington campaign hustings. Getty -
Rishi Sunak arrives for the Darlington hustings. Getty -
Liz Truss plays pool during a visit to the Onside Future Youth Zone in London. Reuters -
Rishi Sunak looks at a book with Teddy Openshaw, 4, as his father, Henry, looks on after a Conservative leadership campaign event in Ribble Valley, Lancashire, England. Getty -
Liz Truss plays table tennis with former Conservative party leader Iain Duncan Smith during a visit to the Onside Future Youth Zone in London. Reuters -
Liz Truss with supporters at a campaign event in Solihull, England. Reuters -
Rishi Sunak attends a campaign event held by his party in Bexhill, England. Reuters -
A protester is removed as Ms Truss speaks during the Conservative Party leadership hustings in Eastbourne. Bloomberg -
Mr Sunak speaks at an event in Edinburgh. PA -
Ms Truss leaves the hall in Exeter, south-west England, after her speech to a Conservative Party membership hustings. Getty -
Mr Sunak speaks at the University of Exeter in south-west England. AP -
A supporter of Ms Truss at a Conservative Party hustings in Exeter, south-west England. Getty -
Ms Truss at a hustings event at the Pavilion conference centre at Elland Road in Leeds. PA -
Mr Sunak in Salisbury watching a screening of the Uefa Women's Euro 2022 final between England and Germany at Wembley stadium. England won 2-1 in extra time. PA -
Ms Truss before the Uefa Women's Euro 2022 final at Wembley stadium in London. AFP -
Mr Sunak meets Tory members at Fontwell Park Racecourse. Reuters -
Ms Truss at an event in Dereham, Norfolk. AFP -
Mr Sunak in Ropley, near Winchester, Hampshire. PA -
Ms Truss speaks as Conservative Member of Parliament Tom Tugendhat looks on at a Conservative Party leadership campaign event at Biggin Hill Airport. Getty -
Ms Truss on the campaign trail in Woodford Green, on the outskirts of London. Reuters -
Mr Sunak at a Conservative Party hustings event in Leeds. AFP -
Ms Truss speaks at the hustings event in Leeds. AFP -
Sunak and Truss-themed souvenirs at a stand during the Leeds hustings event. Reuters -
Ms Truss, and her mother, Patricia, arrive for the hustings event. Getty -
Ms Truss poses with supporters in Morley, England. Getty -
Mr Sunak delivers a speech during a campaign event in Newmarket. AFP -
Ms Truss and Jake Berry, MP for Rossendale and Darwen, during a visit to a broadband interchange company in Leeds. PA -
Mr Sunak answers questions as he takes part in the hustings in Leeds. AFP -
Ms Truss speaks at an event at a private house with members of the Conservative Party in Woodford Green. PA -
Ms Truss and Mr Sunak pose for a picture before a BBC leadership debate at Victoria Hall in Hanley. Getty -
Ms Truss addresses Mr Sunak during the televised debate. Getty -
Mr Sunak, with daughters Krishna and Anushka, and wife Akshata Murthy, during a visit to Vaculug tyre specialists at Gonerby Hill Foot, Grantham. PA -
Ms Truss speaks to people while campaigning in Marden. Getty -
Ms Truss celebrates after being named, along with Mr Sunak, one of the final two candidates in the race to become the UK's next prime minister. PA -
Mr Sunak outside his campaign office in central London. EPA -
Ms Truss outside Downing Street in London. Reuters -
Rishi Sunak meets Conservative Party members and activists, in Teesport, Redcar. Reuters -
Conservative leadership candidates Mr Sunak, Ms Truss, Kemi Badenoch, presenter Julie Etchingham, Tom Tugendhat and Penny Mordaunt during 'Britain's Next Prime Minister: The ITV Debate' in London. EPA -
Ms Badenoch arrives at Here East studios in Stratford, east London, before a live television debate. PA -
Mr Sunak arrives at a London event to launch his campaign to be the next Conservative Party leader and UK prime minister. Reuters -
Mr Tugendhat appears on the BBC One current affairs programme, 'Sunday Morning'. PA -
Ms Badenoch, Ms Mordaunt, Mr Sunak, Ms Truss and Mr Tugendhat before the live television debate. PA -
Ms Mordaunt arrives for the launch of her Conservative leadership campaign at the Cinnamon Club in Westminster. PA -
Ms Truss speaks at the launch event for her campaign to become the next leader of the Tory Party and Britain's prime minister, in London. EPA -
Chancellor of the Exchequer Nadhim Zahawi, one of the candidates who has been knocked out of the race, giving a speech at the Churchill War Rooms. PA -
Former leadership candidate Jeremy Hunt appearing on the BBC One current affairs programme, 'Sunday Morning'. PA -
Sajid Javid attending the launch of his campaign to be Conservative Party leader and prime minister, at the Cinnamon Club in London. He has since been knocked out of the contest. PA -
Rehman Chishti is interviewed after announcing his bid to become the next prime minister. Mr Chishti is no longer in the race. Getty -
Mr Tugendhat speaking at the launch of his campaign. PA -
Culture Secretary Nadine Dorries and Conservative MP Iain Duncan Smith arrive for the Truss campaign launch event. Getty -
Former leadership candidate Attorney General Suella Braverman at the Churchill War Rooms in central London. PA -
Supporters of Mr Sunak wait for his arrival ahead of the campaign launch. Bloomberg -
Mr Tugendhat makes a speech at the launch of his campaign. PA -
Mr Javid mops his brow while launching his campaign. Getty -
Ms Truss leaves for work after her announcement that she would be running for the leadership of the Conservative Party. Getty
Mr Sunak said he would “go further” than he did in May because the situation had deteriorated since, as he took aim at Truss campaign proposals he said would do little for vulnerable pensioners.
“My priority is to protect the most vulnerable in society, including pensioners, and I want them to have certainty that extra help is coming,” he told Sky News.
Consumer champion Martin Lewis said “lives will be lost this winter” if more support was not announced to deal with what he called “unaffordable, terrible rises in energy bills”.
Mr Lewis said people refusing to pay their bills could become “a louder voice in this country” if government support did not act.
“This is a catastrophe, plain and simple, unaffordable,” he said.
The government was accused of hiding from the crisis after no minister was made available to speak to broadcasters on Friday morning.
Chancellor Nadhim Zahawi eventually emerged to say he was “working flat out” to draw up options for the next administration.
He suggested for the first time that people should consider saving power, saying: “The reality is that we should all look at our energy consumption … there is war on our continent.”
The opposition Labour Party said ministers were “missing in action” during the leadership contest.
“You’ve got a prime minister who insisted on staying in office, recognises there’s a problem with energy prices, shrugs his shoulders and does nothing about it,” said Labour leader Sir Keir Starmer.
Ofgem said the increase reflected a global peak in gas prices partly linked to the fallout from the coronavirus pandemic but sent into overdrive by the Russian invasion of Ukraine.
Russia cut off gas supplies to several European countries after the war poisoned East-West relations, and has drastically reduced exports through its main pipeline to Germany.
Although Britain imports relatively little energy directly from Russia, the squeeze across Europe means it cannot escape high prices when it imports gas and electricity from the continent.
Both Mr Sunak and Ms Truss have spoken of wanting to make Britain more energy independent, while also voicing scepticism about the prospect of expanding solar energy and onshore wind.
