O’Grady demands “pandemic-scale intervention” on spiralling energy bills

Frances O’Grady has a demanded a “pandemic-scale intervention” to combat spiralling energy bills after analysis revealed that annual bills are expected to cost more than two months’ wages in 2023 unless the government takes action.

The research, published today by the TUC, noted that average take-home pay is forecast to be £2,054 per month next year according to the Bank of England while the energy price cap is now expected to rise to more than £4,200 in January.

The TUC general secretary said: “No one should struggle to get by in one of the richest countries in the world. But up and down the country, millions of families are being pushed to the brink by eye-watering energy bills.

“With prices set to skyrocket even further, it’s time to say enough is enough. Boris Johnson, Liz Truss and Rishi Sunak need to wake up to the size of this crisis. This requires a pandemic-scale intervention.

“Ministers must cancel the catastrophic rise to energy bills this autumn. And to make sure energy remains affordable to everyone, they should bring the energy retail companies into public ownership.

“Ministers should also act to boost pay – as well as Universal Credit, pensions and the minimum wage by bringing forward planned increases to October. And they should fund it through a bigger windfall tax on the obscene profits of energy giants.”

The TUC is urging the government to meet with trade union and business leaders to develop a joint response to the crisis, as happened during the pandemic, resulting in the creation of the furlough scheme.

The union body has today set out its proposals for urgent cost-of-living support. It is calling for the October rise in the energy price cap to be scrapped and for the government to cover the estimated £38.5bn cost by increasing the revenue raised by the windfall tax.

But the TUC declared that the government cannot give energy companies a “no-strings handout” and demanded that ministers set out plans to reform the energy system, bringing energy retailers into public ownership and requiring new pricing structures that ensure basic energy needs are affordable.

The union body is also proposing that annual increases to the national minimum wage and social security, which usually take place in April, be brought forward to October and that the Treasury announce funding for government departments and local authorities to provide pay rises to the public sector in line with inflation.

The TUC stressed that the current crisis has occurred in the midst of the longest and deepest squeeze on wages for 200 years, which the organisation described as a “political choice of the last 12 years of Tory governments”.

It argued that the privatised energy market has “creamed off” excess profits rather than investing in energy efficiency and renewables, leaving consumers “vulnerable to unstable global markets”.

The TUC is urging the government to devise a plan to make UK living standards more resilient and the economy more resistance to future crises.

It is demanding that ministers set out proposals to get workers’ pay rising, including through stronger pay bargaining rights to enable working people and unions to make fair pay agreements across whole industries.

The union body is urging the government to increase Universal Credit and benefits to 80% of the national living wage and provide a “significant boost” in support for families with children.

In addition to advocating for energy retail companies to be brought into public ownership, the TUC is also calling for a rapid roll-out of home energy efficiency measures as part of the plan.

O’Grady said: “Without a long-term plan to prevent a similar living standards emergency, we will keep lurching from crisis to crisis. After the longest and harshest wage squeeze in modern history, that means getting wages rising in every corner of the country by strengthening collective bargaining.

“It means boosting Universal Credit so that working people have an adequate safety net. And it means fixing our broken energy market by lifting the burden of failed privatisation off families to get bills down for good.”

The TUC unveiled a plan in July to keep energy bills down through public ownership. It stated that nationalisation could reduce bills by: ending shareholder dividends, making money available to cut bills; creating incentives to make homes more energy efficient; and enabling pricing structures with lower costs for basic energy needs.