Gas price hike: 'People will have to choose between eating and heating'

Hard-pressed families will face a 'difficult winter' with rising energy bills and cuts to benefits, a Cabinet minister admitted.

Business Secretary Kwasi Kwarteng said the combination of rising gas prices and the looming £20 a week cut to Universal Credit was a “difficult situation” and he had spoken to Cabinet colleagues including Chancellor Rishi Sunak about the pressures facing households.

Mr Kwarteng is grappling with a spike in global gas prices which has left energy companies struggling and had a knock-on effect on food supply.

Read more: First of its type environmentally friendly 'rubber road' used for Stockton street

Some 4.4 million households on Universal Credit are poised to see their energy bills rise significantly in October – the same month they will typically lose more than 5% of disposable income as the £20-a-week uplift to the benefits payment ends – the Resolution Foundation think tank has calculated.

The energy price cap is set to rise by £139 a year (12%) to £1,277 for a typical gas and electricity customer from October 1 while the Government’s “uplift” in Universal Credit, intended as a temporary measure during the coronavirus pandemic, ends on October 6.

The Government and regulator Ofgem have agreed the price cap will remain in place despite concerns within the energy industry about the impact it will have on firms left unable to pass on costs to customers.

Stephen Morgan, coordinator at NQA Foodbank in Darlington, said: "People are already becoming anxious about the coming months, due to benefit reductions, food shortages and price increases. 

"These factors have a major impact on a person, and their ability to provide support for themselves and their families. With energy prices on the table for being increased, this adds another layer of worry to an already anxious community. 

"We at NQA Foodbank and Pathfinder House, believe that this will cause more people to be relying on food banks, along with making drastic lifestyle changes which potentially will have a major impact on someone's health. 

"People should not be in a position where they are forced to chose between paying rent, bills or buying food. 

"We will be introducing courses, drop in sessions and useful information over the coming weeks to help support the community during the challenging times ahead. 

"We have been working with local agencies and training providers (including Darlington Youth Employment Scheme, Learning&Skills and more) to come up with ideas to be able to combat some of the problems that have already started to arise."

The rise in energy costs has led to a crisis in the food supply chain because of a shortage of carbon dioxide (CO2), produced as a by-product in fertiliser plants.

Andrew Coltman, of King's Church Foodbank in Darlington, said: "We're anticipating, from next month, there will be a lot more people coming through the doors. Some families are going to struggle and then Christmas is just around the corner. I don't know how people are going to cope. People could be made homeless. 

"Gas and electric going up could be the choice between buying food or putting the heating on. 

"All the government do is say 'go to foodbanks' but they don't actually help the foodbanks. We have been here 10 years and it's been like that the whole time. We're thankful we're here and serving the public. But if the funding dries up then we won't be able to continue."

Ministers and industry figures have said there is no risk of the lights going out this winter, with energy supplies secure despite the rising costs.

Matt Vickers MP for Stockton South, said "The Government are very aware of the potential severity of this situation; however, I am assured that they are looking at a wide range of different options to find urgent solutions. The last thing anyone wants is families across Teesside to face increased prices this winter.

"I have had conversations with Government officials on this matter and will continue to do so. I look forward to seeing and scrutinising the proposals that they put forward."

Alex Cunningham, MP for Stockton North, said: "Government Ministers are now openly admitting that people could face a “difficult winter” with rising food prices and energy bills, on top of food shortages, and rises in rents and childcare. Yet the Government’s decision to cut Universal Credit and tax the wages of the lowest paid will only make things worse.

"In my Stockton North constituency, 9452 households are on Universal Credit – around 3,800 of them with children, and many of them working. But decisions made by this Government to cut support will force them to make difficult choices between putting food on their tables or keeping their homes warm.

"This is utterly wrong.

“The sharp rise in gas prices is causing chaos for businesses and customers alike - but much of the hardship that they are facing is of the Government’s own making. It is their failure to get to grips with the issues earlier – despite repeated calls from myself and others – that has resulted in a lack of resilience within our energy system.

"Again, this crisis will hit the poorest in our society the most.

“The Government’s ceaseless incompetence and shameless lack of support for families has driven millions into hardship and pushed them to the brink of an extremely bleak winter.”

Andy McDonald, MP for Middlesbrough, said: “This winter will be tough for many families across Middlesbrough. Rising energy bills are difficult to manage when you are trying to heat a home and feed yourself and your family.

"A hike in gas bills is being made even more difficult thanks to this Government going ahead with the awful £20 cut to Universal Credit. This is cruel and I know people will suffer because of the callous behaviour of the Conservative Government.” 

Jacob Young MP for Redcar said he recognised the difficulties faced by families and individuals but stressed that help is available for those struggling to meet costs.

He added: "In Redcar and Cleveland I'm aware it is the elderly that represent some of the most at-risk individuals when it comes to fuel poverty. 

"Winter Fuel Payments are the largest benefit paid to pensioners, and continue to be available to all pensioners. 

"In addition to Winter Fuel Payments, Cold Weather Payments are available and the Warm Home Discount provides over one million vulnerable pensioners with a £140 rebate on their energy bills."