Some of the poorest people in the UK will “simply starve or freeze”, as a result of rocketing energy prices, consumer expert Martin Lewis has warned, as he urged Rishi Sunak to take action in his spring statement.
Lewis said energy bills for an average household, already set to rise to £1,971 in April, could hit £3,000 in October, when the regulator Ofgem next sets the price cap. “That’s my conservative guess: not the worst case,” he said.
“I think people are going to feel worse than they have for a long time this year. When your energy bill comes in and it’s £3,000 for a year instead of £800, nobody feels good.”
In an interview with the Guardian, the founder of the MoneySavingExpert website gave a stark assessment of the potential effects of such a rapid increase, when many families are already struggling, and inflation is running at a 30-year high.
“When you start to have absolute poverty, which is what we’re going to be talking about with this, when you start to have panic, and a nihilistic feeling of the future, when our charity services start to be swamped … then I think you have to get to the point where you have to question what the impact on wider society is, because you know that extreme poverty causes civil unrest,” he said.
“I hope we are not there yet, and I hope we won’t get there,” he added, but called on Sunak to offer “something that gives people peace of mind that they will survive – and I use that language deliberately”.
The chancellor announced a package of measures last month to soften the blow of surging energy costs, including a £150 council tax rebate for homes in bands A to D, and a £200 discount on bills in October, which will be repaid with higher bills in future years.
Sunak is holding the line against making that scheme more generous when he gives his spring statement on 23 March. Lewis – who has been critical of the £200 rebate, which he calls a “loan-not-loan” – urged him to go further, given the renewed increase in prices since Russia’s invasion of Ukraine, which will feed into the October energy price cap.
The Treasury argues that it is unclear how much more the energy price cap will rise in October, allowing Sunak time to take further action later in the year if needed – but given the scale of concern among consumers now, Lewis called for “forward guidance” from the chancellor.
“We do not need wholesale plans and costings – we need the commitment that something will be done, and the scale of help for the individual.”
He argued that the chancellor’s first priority must be “those people who will simply starve or freeze because of this. And that is not exaggeration”.
Lewis said a recent phone-in on his Radio 5 live show, in which members of the public discussed what they were doing to cope with the rising cost of living, had reduced him to tears.
“I had so many people cutting back on food, and saying, ‘I’m prioritising kids’ food rather than my own’,” he said.
He said the government would also come under pressure from middle-earners, who will still be able to put food on the table – but for whom the squeeze will be a “massive lifestyle hit”.
Lewis, who has interviewed Sunak several times, said he had been “genuinely quite impressed” on meeting him, and rejected the idea that he doesn’t understand the concerns of low-income households – but urged the chancellor to ditch his ideological attachment to balancing the books.
“My call to him would be, I’m afraid you’re asking people to suck it up, and I think they do need to suck some of it up, but I think maybe, chancellor, if you could suck up some of your ideology and get it sorted.”
He added: “If I were a Tory MP, especially if I were a ‘red wall’ MP, I would be saying ‘you have to nip this in the bud, chancellor’, because this is going to be catastrophic for those people. We told them that life will get better. And manifestly they’re seeing it getting worse.”
Setting out the government’s plans earlier this week to phase out Russian energy imports, the business secretary, Kwasi Kwarteng, suggested the British public were prepared to “endure hardships in solidarity with the heroic efforts that the people of Ukraine are making”.
But Lewis argues it is important to be clear that much of the cost of living crisis originated before the invasion – though it has been exacerbated by it. “I am worried about an over-simplistic narrative that uses this as a convenient, catchy reason for what is happening,” he said.
Separately, the TUC warned that energy bills were set to rise at least 14 times faster than wages this year. The union organisation said its analysis showed that gas and electricity bills were on course to increase by 54% when the price cap set by Ofgem changes in April, but average weekly wages will go up by 3.75%.
It estimated that record high energy prices could wipe out the entire value of pay rises this year.
The TUC says those on low incomes will be hit hardest by sky-rocketing bills, as years of weak wage growth and benefit cuts leave working families “badly exposed” to the cost of living crisis.
The TUC estimated that since 2010 energy bills have risen at twice the speed of average wages.
