The demand to freeze the energy price cap at its current level of £1,971 – preventing regulator Ofgem from allowing a huge expected rise to around £3,600 in October – will put intense pressure on Tory leadership candidates Liz Truss and Rishi Sunak, to follow their example when one becomes prime minister. Starmer’s plan, to be announced on Monday, comes as 70 of the country’s biggest charities and organizations in health, mental health, education, care and other sectors today warn Truss and Sunak in a joint letter of dire consequences across British society unless they take drastic action to tackle the energy crisis and the wider cost of living. Paul Kissack, chief executive of the Joseph Rowntree Foundation (JRF), which coordinated the letter, said the UK was facing a “national emergency” while the government was “asleep at the wheel”. Calling for urgent help for the most vulnerable, in the form of a doubling of the £1,200 pledged earlier this year to households in means-tested benefits, Kissack said: “Without this, vulnerable people will face a disaster on a massive scale when winter comes . The consequences of sitting idle are unimaginable.” Starmer, who returned from holiday late last week, has come under pressure to say more on energy prices after former Labor leader Gordon Brown stepped in with a series of major interventions. In the Observer last weekend, Brown called for an emergency budget. He also called for the price cap to be frozen, as well as the temporary nationalization of energy companies that refuse to offer lower bills. In a pointed remark that some saw as a simple reference to Starmer, Brown wrote in the Guardian last week: “Time and tide wait for no man. Not even the crises. They don’t take vacations and politely light fires.” It is understood Starmer will call on the Government to instruct Ofgem to freeze the cap on bills, saying it is within its power to do so. Senior sources said the choice for Labor was between supporting huge amounts of extra cash help for the most vulnerable or preventing a massive autumn rise in energy prices at the source. “It seemed best to stop the rise from happening in the first place,” said one senior insider. In response to the rapid rise in wholesale prices, Ofgem warned in May that the cap would have to rise by around 40% to around £2,800 in October. Since then, forecasts have soared, with analysts at Cornwall Insight last week predicting a rise of £3,582, more than 80% higher than the current limit. They also forecast further increases to £4,266 in the first quarter of 2023. New analysis for the Institute for Public Policy Research, commissioned by the Economic Change Unit, finds that freezing the price cap will not only save families over £2,000, but will also help contain inflation by preventing it from ’embedding ” in economy. . The research says that if the cap is lifted to £3,600, as predicted, inflation would jump to around 13%, but if it is frozen at £1,917, inflation will be kept at 9.2%. Sarah-Jayne Clifton, executive director of the Economic Change Unit, said it was time for the government to act and make energy companies pay: “Other countries have kept prices low to protect citizens’ financial security. There is absolutely no reason why our government cannot do the same and shift the burden to those who are profiting from this crisis.” The energy price cap, introduced in 2019, limits the maximum amount energy suppliers can charge for each unit of gas and electricity used. In their letter to Sunak and Truss, the 70 charities and other organisations, including JRF, AgeUK, Trussell Trust, Children’s Society, TUC, Shelter, MacMillan Cancer Support, Mind, Oxfam GB and Action for Children, tell the prospective leaders of the Tories that “The cost of living crisis in low-income households is the most serious issue facing our country”. Charities have warned Rishi Sunak and Liz Truss that the rising cost of living is the most serious crisis facing Britain. Complex: PA They add: “So far this year, almost three-quarters of low-income households receiving universal credit or other means-tested benefits, many of them working families, have been forced to go without at least one basic item. This means people have to skip meals or can’t heat their homes properly. “Many of our organizations work directly with these families and are overwhelmed, too often unable to provide the support that is so desperately needed. “This situation cannot continue. As the aspiring leaders of this country, we urge you to act now to show the compassion and leadership needed to confront this issue head-on.” Isabel Hughes, policy engagement officer at the Food Foundation, who also signed the letter, said: “Continued price rises and the approach of winter will continue to make life more difficult for low-income families and those with received proportionately less support so far. are at particular risk. The government urgently needs to protect families from the worst effects to protect children’s health and futures.” A new poll for the Lib Dems, who also back the capital freeze, on Sunday revealed that seven in 10 Tory voters support plans to scrap the October rise. Leader Ed Davey said the move should be funded through a “tougher windfall tax on energy giants making record profits”. Labor said last night that its plans to insulate more homes will save millions of families over £1,000. Ed Miliband, shadow climate change and net zero secretary, said: “Twelve years of Conservative failure to insulate our homes is one of the reasons the bills are so high. Too many workers and retirees live in dry, cold homes with high heating costs. If they were serious about cutting the bills they could start now by implementing the Warm Homes scheme that Labor has been calling for. A proper national mission would save 19 million families over £1,000 in bills and boost our energy security.”
