Energy poverty

 ‘Great Britain’s energy price cap has fallen to £2,074 a year, but the average household will still pay almost double the rate for their gas and electricity than before costs started to soar.

About 27m households can expect a modest drop in energy bills this summer after the regulator Ofgem lowered the cap on the typical annual dual-fuel tariff to reflect a steep drop in global energy prices over recent months.

From July, when the change takes effect, households will see their average gas and electricity bill fall from the £2,500 a year level set by the government’s energy price guarantee.However, those who struggled to pay their bills over the winter will feel little relief, because government top-ups worth £400 between October to March have come to an end.

Households also face being charged an extra £10 a year on their energy bills from October to bolster the profits of their energy provider, under plans put forward by the regulator alongside the new cap.

Under the new cap, the average energy bill will remain almost double the level seen in October 2021 – when Russia began restricting supplies of gas to Europe in a move that sent wholesale prices soaring. Before the energy crisis, the typical household paid £1,271 a year for gas and electricity.

Households could still face dual-fuel bills above £2,074 if they use more than the typical amount of energy because Ofgem’s cap limits the rate energy suppliers can charge customers for each unit of gas and electricity – not the total bill.

The cap does not offer help to businesses, charities or public sector organisations such as schools, hospitals and care homes. A scheme brought in by the government at the start of April offers eligible businesses a discount on the wholesale price of energy, offering a total of up to £5.5bn of support over a year, far less than the estimated £18bn over six months given out under the previous aid package.

Jonathan Brearley, the chief executive of Ofgem, said: “After a difficult winter for consumers it is encouraging to see signs that the market is stabilising and prices are moving in the right direction.”

“However, we know people are still finding it hard, the cost of living crisis continues and these bills will still be troubling many people up and down the country. Where people are struggling, we urge them to contact their supplier who will be able to offer a range of support, such as payment plans or access to hardship funds,.”

Brearley added that households were “unlikely to see prices return to the levels we saw before the energy crisis” in the medium term. He said it was imperative that government, Ofgem, consumer groups and the wider industry work together to support vulnerable groups.

Simon Francis, a coordinator at the End Fuel Poverty Coalition, said: “The sting in the tail to this announcement is that customers are still going to be paying roughly the same for their energy as last winter. And after months of inflation and the wider cost of living crisis, people are even less able to afford these high energy bills.”

Ofgem has proposed increasing the amount of profit suppliers can make from 1.9% to 2.4% to prevent them going bust, because the cost of bailing out a failed supplier would be higher. Under the plan, annual supplier profits would climb from £37 a household to £47.

Under the new cap, the average energy bill will remain almost double the level seen in October 2021 – when Russia began restricting supplies of gas to Europe in a move that sent wholesale prices soaring. Before the energy crisis, the typical household paid £1,271 a year for gas and electricity.

Households could still face dual-fuel bills above £2,074 if they use more than the typical amount of energy because Ofgem’s cap limits the rate energy suppliers can charge customers for each unit of gas and electricity – not the total bill.

Fuel poverty campaigners at National Energy Action have warned that most households are unlikely to feel any better off, and about 6.5m households will remain in fuel poverty despite the lower rate.

Energy experts believe households could face much higher than normal energy bills for years to come, as Russia’s war in Ukraine keeps prices on the global gas markets stubbornly high. Analysts at Cornwall Insight have warned they do not expect bills to return to pre-2020 levels before the end of the decade at the earliest.

Francis called on the government to use the warmer summer months to “fix Britain’s broken energy system” by “ramping up energy efficiency programmes, helping the public with energy debt and reforming energy pricing arrangements so people don’t suffer again this winter”.

Georgia Whitaker, a campaigner for Greenpeace UK, said the winter energy crisis “should have been a wake-up call for the government to deliver the nationwide insulation programme and wholesale switch to cheap, renewable powered heat pumps”.

Grant Shapps, the energy secretary, said : “We’ve spent billions to protect families when prices rose over the winter covering nearly half a typical household’s energy bill – and we’re now seeing costs fall even further with wholesale energy prices down by over two-thirds since their peak.”’

https://www.theguardian.com/money/2023/may/24/millions-will-still-face-fuel-poverty-despite-ofgem-move-to-cut-energy-price-cap

Socialist Stanza No. 11

Going Through the Motions

 

Face to face across The Commons

MPs snarl and point fingers.

But, is party rivalry real

Or posturing? Doubt lingers.

 

Principles are quite flexible,

Need to say what’s expected,

Even sound quite radical if

It helps getting elected.

 

“I want to make a difference!”

Or so the candidates claim:

Yet, whoever garners the votes,

Most things stay largely the same.

 

LibDem! Labour! Conservative!

No matter which of them win,

A change of party maybe, but

The government still gets in.

 

D. A.

‘Unaffordable, inaccessible and insecure’

‘Private renters are almost twice as likely to be struggling with problem levels of debt than the general population, with a sharp rise in the numbers in serious financial difficulty since January, research shows.

The figures come against a backdrop of private rents in the UK hitting record highs, and days after the government announced a shake- up of the sector to tackle the ‘injustices’ that many tenants are facing.

The debt charity StepChange, which issued the polling data, said that “with so many renters in financial difficulty”, stronger protections for those who fell behind with their rent were required or else people would be left vulnerable to “hair-trigger eviction”.

It said that while the renters’ reform bill announced last Wednesday was welcome, it did not go far enough, as many financially and otherwise vulnerable tenants faced challenges that would not be addressed by the proposals.

The private rented sector was now “unaffordable, inaccessible and insecure for those on the lowest incomes, leaving them at high risk of problem debt, poor mental and physical health and prolonged housing insecurity,” the charity said as it issued a report.

It also published a YouGov poll showing that 15% of private renters – 1.1 million people as of this month – were in problem debt, compared with 8% of the general population. The charity added that this number had risen “sharply” – by more than a third – since January, when it stood at an estimated 800,000 people, or 11% of private renters.

Signs of financial difficulty include using credit, loans or an overdraft to make it through to payday, falling behind on essential household bills, using credit to keep up with existing credit commitments, and getting hit by late payment or default charges, said StepChange, with those in severe problem debt typically displaying three or more of those signs.

The research also found that half of all private renters – about 3.7 million people – had had their rent increased in the last 12 months, while more than 1.2 million said they were using credit to make ends meet.

Many have described the private rented sector as being in crisis, which Michael Gove, the housing secretary, appeared to acknowledge last week when he said: “Too many renters are living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.”

The number of households renting in England more than doubled between 2001 and 2021, the latest census revealed, and a string of surveys have indicated that typical private rents have hit new highs. Earlier this month the estate agent Hamptons said tenants in Great Britain were now paying typically 25% more than they were at the start of the Covid pandemic.

Meanwhile, experts say severe shortages of rental properties have led to intense competition for what is available, with queues for viewings, desperate renters paying over the odds, and some landlords insisting on a year’s rent in advance.

StepChange’s report stated that one in five private renters who had tried to find a new home in the last 12 months said they were asked to pay more than two months’ rent in advance. More than half were asked to bid on the property they were trying to rent, and only 28% were successful, it added.

The charity’s client survey found private renters “struggled with the affordability of their homes more than any other housing tenure”. Average monthly private rent payments were found to be almost double those in the social sector, and 39% more than average mortgage payments.

The reforms outlined by the government last week will ban no-fault evictions but also strengthen landlords’ rights to throw out tenants for antisocial behaviour.

The Department for Levelling Up, Housing and Communities said at the time that, as a result of its package, 11 million tenants across England would “benefit from safer, fairer and higher-quality homes thanks to a once-in-a-generation overhaul of housing laws”. The department was approached for comment.’

https://www.theguardian.com/money/2023/may/23/private-renters-almost-twice-as-likely-to-struggle-with-debt-than-uk-general-population

Food costs up 17.2 %

UK food price inflation remains at the third-highest level since the financial crisis, with the annual rate at which the cost of groceries is increasing at the elevated level of 17.2%, retail industry data shows.

Prices barely eased during the four weeks to 14 May to only marginally below April’s 17.3% figure, according to the latest release from the analytics firm Kantar, representing the third-highest rate of grocery inflation since 2008.

Even though the average cost of four pints of milk has come down by 8p since last month, it remains 30p higher than it was this time last year at £1.60.

Stubbornly high food and drink prices have added an extra £833 a year to shoppers’ bills, Kantar found, unless consumers make changes to their usual habits to try to cut the cost.

More consumers are turning to supermarket own-brand product, a trend also reported in April, in an attempt to keep their bills under control. Sales of the cheapest own-label products soared by 15.2% over the past month, almost double the 8.3% increase for branded products.

Fraser McKevitt, the head of retail and consumer insight at Kantar, said: “The drop in grocery price inflation, which is down by 0.1 percentage points on last month’s figure, is without doubt welcome news for shoppers – but it is still incredibly high.”

Shoppers flocked to the discount supermarkets, Aldi and Lidl, as they sought bargains. Aldi became the fastest-growing grocer over the past month as its sales increased by 24%, while sales at Lidl rose by 23.2%.

However, Waitrose benefited from shoppers splashing out on extra treats before the coronation of King Charles. Its sales grew by 4.8%, the highest growth rate it has experienced for more than two years.

Despite the pressure on household budgets, consumers spent an extra £218m on groceries during the week of the coronation, when there was a rise in sales of wine and quiche.

https://www.theguardian.com/business/2023/apr/25/uk-shoppers-own-label-food-price-inflation-price-rises-kantar

Summer School 2023

 There are still spaces available for Summer School, so bookings are still open. For more information about the event, chick here.

Eat or Heat?

‘Rising food prices will soon overtake energy costs as the main force fuelling inflation in the UK, an independent think tank warned in a report on Friday. Food makes up a far larger share of the typical household’s consumption than energy, says the Resolution Foundation, whose aim is to improve living standards for those on low to middle incomes. As grocery prices will remain at a high level while energy costs decline, this summer “food costs will have overtaken energy bills in the scale of the shock they are administering to family finances,” the think tank predicted. Grocery bills have jumped by almost 20% during the past year, official figures for March showed, with the overall consumer price index standing at 10.1%. Energy prices peaked at record levels last year but have since declined significantly.’

‘The cost of living crisis is often thought of as a cost of energy crisis. That is an understandable, but increasingly inadequate, view. In particular, it understates the growing role of food prices (up by 25 per cent over the past year and a half) in the squeeze on living standards that households – especially low- and middle-income households – are living through.

While energy prices have risen faster, food makes up a far larger share of the typical household’s consumption (13 versus 5 per cent in 2019-20). This, combined with food prices continuing to rise even as energy bills fall back, means that by this summer the average increase in food costs since 2019-20 (£1,000) will be larger than that for energy bills (around £900). And this is not just true at the average: this will also be the case for a majority of households (56 per cent or 16 million). The food price shock is about to overtake the energy price shock as the biggest threat to family finances.

This spotlight examines the contribution of food prices to today’s high inflation and the pressure on households’ living standards, before considering how families and government have responded to date.

Inflation is on the way down. Having plateaued close to 40-year highs since the Autumn, sharp falls are anticipated from next week: a near 2 percentage point reduction from March’s 10.1 per cent is expected in April, as Figure 1 shows. This marks the end of the peak energy costs part of this crisis, albeit without energy bills remotely returning to pre-crisis norms. This first significant fall is driven by April 2022’s large increase in the energy price cap dropping out of the annual inflation calculation. But next week will also see confirmation that energy prices will actually fall from July – the energy price cap is expected to be reduced from £2,500 to £2,063) – reflecting the retreat of wholesale energy prices, and contribute to inflation falling back further through 2023.’

https://www.resolutionfoundation.org/publications/food-for-thought/

Adding insult to injury

 ‘Britons don’t have an automatic right to low food prices, former Conservative MP Ann Widdecombe has claimed, adding that people should simply go without certain items if they are struggling financially.

Discussing the UK’s cost-of-living crisis on the BBC’s Politics Live show, the former Tory member suggested that anyone claiming unemployment benefits should be made to fill labour shortages by picking fruit.

Widdecombe also advised people who cannot afford to pay for some food items to simply stop buying them. 

“Well then you don’t do the cheese sandwich. None of it’s new. We’ve been through this before,” she said. “The problem is we’ve been decades now without inflation, we’ve come to regard it as some kind of given right.”

The cost of living has risen sharply in the UK over the past two years, with annual inflation standing at 10.1% in March, driven largely by soaring food prices. Although the inflation rate dipped from 10.4% in February, it fell less than expected and is still well above the Bank of England’s target of 2%.’

‘The cost of British food staples such as cheese, white bread and porridge oats have soared – with one brand of cheddar increasing by 80 per cent in one year.

Overall inflation on food and drink at supermarkets continued to rise in March to 17.2 per cent, up from 16.5 per cent the month before, Which? found.

The price of cheddar cheese, which accounts for roughly half of all cheese sales in the UK, increased by an average 28.3 per cent across eight major supermarkets – Aldi, Asda, Lidl, Morrisons, Ocado, Sainsbury’s, Tesco and Waitrose – compared to a year ago.’

https://www.independent.co.uk/news/uk/home-news/which-supermarket-cheese-price-uk-b2322366.html

China’s ‘reserve army of labour’ set to increase

 Shu Xiang, 21, started looking for a job in February and still has had no luck. A financial management major at a college in Chengdu, China, Ms. Shu said she had received five responses to about 100 applications. Graduation is in a few weeks.

“I’m not so confident about finding a job,” she said. The only thing that makes her feel less anxious, she said, is knowing she’s not alone — most of her classmates were facing similar problems.

Ms. Shu is one of nearly 12 million Chinese expected to enter the job pool next month at a difficult time. The government reported this week that 20.4 percent of people ages 16 to 24 looking for a job were out of work in April. That is the highest level since China started announcing the statistic in 2018.

High youth unemployment has been a dark stain on China’s economy for several years, exacerbated by strict pandemic health restrictions limited travel, decimated small businesses and damaged consumer confidence. The government, facing rare public discontent as young professionals in major cities across China protested the “zero Covid” rules, abruptly announced in December that it would start easing the policies. But the youth jobless rate has remained high, even as the overall rate has ticked down two months in a row.

The Chinese government has introduced a set of policies meant to stimulate youth employment, including subsidies for small and midsize businesses that hire college graduates. State-owned enterprises have been directed to make more jobs available for those just starting out...’

https://www.nytimes.com/2023/05/19/business/china-youth-unemployment.html

"Why should the Earth be privately Owned?"

Party Meeting tomorrow evening Friday 19th May at 19 30 (18 30ut) on Zoom

"Why should the Earth be privately Owned?"

Speaker: Adam Buick