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.
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.
It’s a difficult situation, it could be a very difficult winter
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.
Mr Kwarteng said: “I’ve been very clear that the energy price cap is staying even though some energy companies I read today are asking for it to be removed, I’ve been very clear that that’s staying, so we’re protecting customers there.
“We’ve got the warm home discount, we’ve got winter fuel payments, which are again focused on the most vulnerable customers. So, we’re completely focused on helping vulnerable customers through this winter, particularly with regard to energy prices.”
And with Universal Credit claimants four times as likely to be on pre-payment meters as the rest of the population, they’ll likely face the biggest energy bill rises of all.
— Resolution Foundation (@resfoundation) September 20, 2021
Pushed on the issue of Universal Credit, he told the BBC: “It’s a difficult situation, it could be a very difficult winter.
“That’s why, as energy minister, I’m very focused on helping people that are fuel poor.
“Universal Credit, you will know, is an issue for the Chancellor and the Work and Pensions Secretary, I’m speaking to them a great deal about it.”