Millions of homes will still need extra help despite a multi-billion dollar government plan to mitigate the impact of higher energy bills, campaigners have warned.
On Thursday, the government announced a plan to help households with their energy bills for two years.
Businesses are protected from sharp increases in energy prices for six months.
The Joseph Rowntree Foundation said the poorest families still face an £800 shortfall in household income.
The End Fuel Poverty Coalition said more support was needed to help the poorest families through the winter.
And business groups have also raised concerns about the lack of detail explaining how the new price cap will work for businesses.
The Federation of Small Businesses said the plan was “sparse in detail”.
While the government has promised support for the most vulnerable sectors, highlighting the hospitality sector, it has said there will be a review in three months to decide where the aid should go.
Small businesses warned they may not remain in limbo for the next three months.
Anti-poverty groups had warned that the sharp rise in energy bills due to take place in October, combined with soaring prices across the board, including for food, would push millions into poverty and put health and lives at risk.
Businesses are also grappling with rising energy costs, and there have been warnings that tens of thousands could be left without support.
On Thursday, new Prime Minister Liz Truss announced the government would borrow billions of pounds to subsidize the companies that supply energy to UK homes and businesses so they don’t have to pass on the rising cost of wholesale gas to their customers.
But while many households would benefit from government intervention, more help would be needed to prevent millions of people from falling into fuel poverty this winter, which would put further pressure on the NHS and social care system, said Simon Francis of the End Fuel Poverty Coalition.
A household is considered energy poor if it spends 10% or more of its income on energy.
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Without further investment in insulation, energy efficiency and renewable power generation, the government’s plans risk becoming “an expensive band-aid,” he added.
The Joseph Rowntree Foundation (JRF) said after taking into account the announcement on energy bills there was still a gap of £800 between the overall increase in the cost of living and the support package given to the poorest families.
JRF said the new lower ceiling on energy bills combined with the previously announced £400 help on energy bills and other support measures would mean a low-income family would receive around £2,100.
But that would not be enough to cover rising energy and other costs, which would total around £2,900, said JRF.
“The government’s energy price freeze has prevented a stratospherically forecast price hike from October, but struggling households remain extremely concerned about how to close the gap,” said JRF chief analyst Peter Matejic.
“This shows that Liz Truss’ work is not yet done. As she unveils other plans as part of her tax return, she must think of the many low-income families who are suffering hardship.”
Some of these families are likely to be in the Cardigan Lane and Mayville Road area of Burley, Leeds, an area where almost every household is at risk of falling into fuel poverty this winter.
“The housing quality here is pretty bad, there’s really been a lack of investment,” said Lianne Lett, hospitality manager at The Left Bank, a community arts center set up in a former church.
The stained glass windows mean it takes more than ten radiators to heat the center, but Ms Lett will try to keep it warm by accommodating locals, groups of toddlers and students, and offering a hot meal.
“People haven’t recovered from the pandemic, they’ve used up their savings, the cost of living is rising,” Ms Letts said.
On the edge of the neighborhood is Brudenell Primary, a school that “has had problems with deprivation in the past,” principal Jill Harland said.
Anxiety at home because of bills, difficulty affording food, cold weather all affect students’ learning, she said. She thinks the government’s bailout package could be better targeted at the poorest households.
Craig Bunting, owner of Derby coffee shop, said businesses like him are in dire need of help.
“Hospitality cannot wait three months in limbo,” he said. He said cutting VAT would prevent independent businesses from going under.
Pubs and restaurants say the plans announced so far are too vague and leave questions unanswered, meaning they can’t plan ahead.
“We work in much longer cycles than six months to make hiring and investment decisions,” said Robert Chapman, who runs a cafe and tearooms in Beverley in the East Riding of Yorkshire.
Martin McTague, national chair of the Federation of Small Businesses, said the promise of help has been a huge relief for many small businesses, but firms need more detail.
“Done right, this will be a lifeline – protecting jobs, communities and future economic recovery.”
“However, the announcement is very high-level and sparse in detail, so we will be working with the new government to clarify what happens next,” he said.
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