Rising energy prices have made people concerned about how they will pay their bills. To prevent widespread hardship, new Prime Minister Liz Truss has announced limits on energy bill increases.
Households had expected to pay around £3,500 a year for energy from October, but Ms Truss said they will now be paying no more than £2,500 a year for the next two years.
Businesses get “equivalent” support, with bills capped at six months.
We asked households and small businesses how the government’s plans will affect them.
Michael Ball, 25, of Kirkcaldy is on Universal Credit and works. With the help of his deputy, he is trying to fix his prepayment meter and have an air source heat pump installed in his apartment. Otherwise he will have to move back in with his parents.
The new limit of £2,500 a year on average is “useless to me,” he says, because he was already struggling with his bills when the last price cap of £1,971 hit in April.
“I haven’t turned on my heating for eight months because I just can’t afford it,” he says. “The price was already too high in April.”
Michael has bipolar disorder and says stress about energy bills isn’t helping his mental health. Thinking about how to make ends meet takes up all of his time, he adds.
What he would have wished for from the state was help with the insulation and the replacement of the old electric night storage heaters in his apartment.
- What the new energy plan means for you
BBC Newsbeat spoke to people in Southend-on-Sea in Essex,
Ronnie Malone, 18, says: “It’s good that they capped it at £2,500 as opposed to the £3,500 it was. But it’s still a lot higher than what it really should be.”
Ella Robinson, 23, has two young children and says that despite the announcement, the thought of higher bills “remains a bit scary because not everyone can afford it”.
“And you know, we’re just going to think about how many times to boil the kettle today.”
Joe Hopkinson, 23, lives in an outhouse in his parents’ backyard. They pay the bills, but he says his mom is “on it” when it comes to turning off electronic devices if he leaves them on.
“Everything goes up. You know you gotta do what you gotta do. She doesn’t let me leave the TV on when I’m going out and stuff,” he says.
Jay Sota, 28, believes Liz Truss’ move “just puts a band-aid on a big problem.”
He also says he is concerned about continued government borrowing in the wake of the pandemic.
“I think it always poses long-term problems for the economy.”
Annette Dolan, 65, chief executive of Bath Aqua Glass, says that despite government help, she is worried she could lose her business and her 17 employees could be out of work.
Businesses have been offered support for six months, with continued support for vulnerable industries. But without further details, Annette says she is “still very nervous”.
Her company’s gas bill was set to rise from £14,000 to £233,000 before the government intervened. “This is Alice in Wonderland,” she says.
She wouldn’t be able to afford that, but next month she’ll still have to turn off her oven depending on how high her bills climb.
Annette considers “emergency measures,” including buying a smaller, portable stove that’s easier to turn on and off but isn’t as efficient.
One of her employees, Carly McKeever, says that even with government help for the company for six months, she still doesn’t know if she’ll have a job afterwards.
“If I get laid off, I could lose my home,” says Carly, who has three children.
Cheryl Horne, 72, a pensioner in Nottingham, has health problems and is unable to leave the house without help. She has three caregivers who come during the week and she contributes to the cost of this service.
She has installed solar panels that help keep her energy bills down in the summer. “I don’t know what will happen in the winter months,” she says.
Cheryl was hospitalized with sepsis for a year. “I have to keep warm,” she says. “If you have to live on a pension, that’s not much.”
She says the government could have given “more help” to pensioners and people who need to keep medical equipment working.
“There are people who use nebulizers, who use medical devices. You can’t just turn off your heating and put on a sweater because it affects your health,” she says.
She adds that the government could have done more on permanent charges. “Even if you don’t use electricity or gas, the daily charges have increased massively,” she says.
Small business owner Peter Ensinger, 57, from Creswell, near Worksop, may have to file for bankruptcy as energy costs soar.
Since last year, bills for his pizza and kebab shop have doubled, from around £400 a month for gas and electricity to around £800 a month.
“Cooking oil has tripled in price and flour has doubled in price since I took over this business in 2020. I just found out my gas bill alone is now £500 a month,” says Peter. “It’s a nightmare.”
He says Thursday’s corporate energy plan didn’t provide much detail and bankruptcy is still a serious prospect.
“[Liz Truss] said after the first six months of helping businesses they will target the help to vulnerable businesses. I hope this includes takeaways. Takeaways were left out of the omicron variant last year. I hope we’re not excluded this time either,” he said.
“We also need more details on this aid to businesses, otherwise we’re just kicking the can on the street for the next six months.”
Bengu Sait has owned the Diva Café in Brighton for eight years. Her bills came to around £1,070 a year – but after her energy company went bust last year and she switched to a new supplier, her annual estimate rose to £2,700.
Her new supplier quoted an estimated fee of £60 for two days of use, while she was previously paying around £100 a month.
“I feel like there is no government at all in this country when it comes to energy prices,” says Bengu. “I always had a loan from my energy company. Now I am always in debt no matter how much I can pay.”
She is unimpressed by the unveiling of the Prime Minister’s energy plans.
“Companies have to plan. As the measures are not detailed, Ms. Truss’ announcement does not make my life any easier today than yesterday.”
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