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Boris Johnson

Boris Johnson. Photo: Kyle Heller / No 10 Downing Street / CC BY-NC-ND 2.0, license linked below article

The zombie Tory government is sitting on its hands and the leadership contenders offer no solutions as energy companies rake in record profits at working people's expense, writes Terina Hine

As the cost of living crisis becomes a cost of living catastrophe, the government is absent. In October, almost half the UK population, that’s 35 million people, will face fuel poverty and many will be plunged into destitution.

It was no surprise that Gordon Browns plea on Sunday for Boris Johnson and the two prime minister hopefuls to come up with plan was met with a flat-out refusal. After all, it is the summer holidays, and Sunak and Truss have a contest to fight.

But this inaction is a dereliction of duty, and as the zombie government does nothing the population is living in fear of the coming winter.

Last May, Ofgem projected the fuel price cap would rise in October to £2,800 a year, this has now been revised by energy consultancy Cornwall Insight to £3,582, an increase of more than £700. By January the cap is expected jump to £4,266, and by April next year could reach a staggering £4,427. For comparison, in October 2021 the cap was set at £1,400. This exorbitant rise is simply unaffordable for millions of people.

At the same time oil and gas companies like Shell and Centrica are posting record profits. Centrica announced last week that its profits rose five-fold in the first six months of 2022. Shell reported sky-high profits of $11.5bn, a doubling of its income in just one year. This is nothing less than scandalous.

The government could cap prices and bring an end to the wild west that is the UK’s energy distribution market, but it doesn’t. Instead it prioritises its big business friends and clings to its free market ideology.

In France, hardly a socialist utopia, gas prices were frozen in October 2021, while electricity companies are prevented from increasing prices by more than 4%. Consumer tariffs are guaranteed, and the state pays the difference between the price charged to the customer and the market rate. The French government has also taken the energy giant EDF into public ownership. It is a political choice that prevents similar action here.

The price for that choice is very high indeed and its ordinary people who are paying. This emergency is likely to surpass the 2008 banking crisis in its severity and in its impact, and it requires urgent, state-led intervention. Neither the government nor the two candidates for PM acknowledge the scale of the crisis.

Martin Lewis, the money saving expert, says the new January figure equates to 45% of the new full state pension. Pensioners will be left in the cold, many could die.

With those on the lowest incomes spending proportionately more on heating than richer households they will be hit the hardest. Thousands of children already go to school hungry, autumn will see those numbers swell as families face unimaginable costs in order to cook a meal or keep warm, and those lucky enough to have savings will find the money rapidly disappears. The pain will be felt by us all.

On Tuesday, the head of the CBI piled pressure on the government to act now in the face of the terrifying” energy price hikes. Downing Street claims it is impotent until the new PM is selected on 5 September. But Ofgem won’t wait any more than the bills.

Worryingly, neither of the candidates for PM have any serious ideas of how to deal with this crisis, their suggestions are mere tinkering around the edges. Rishi Sunak promises to cancel VAT from energy bills for a year and Liz Truss says she will temporarily remove "green levies" from bills. Her proposal to reverse the National Insurance hike would barely dent the average bill increase and would do nothing to help the poorest or pensioners or the disabled - all of whom have higher energy usage. The lack of any action or a plan of how to deal with this emergency is truly alarming.

And where is Starmer at this critical time? Oh yes, I forgot, it’s August, hes on holiday too.

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