Cost of living crisis: Brits wake up to soaring energy bills as MPs get £2k pay rise

1 April 2022, 00:06 | Updated: 1 April 2022, 06:21

Brits are waking up this morning to a massive hike on the limit they can be charged for energy, as MPs awoke to a £2,000 pay rise.

The next grim milestone in the cost-of-living crisis arrived as the energy price cap rose by 54%, meaning households face much higher costs for heating and powering their homes.

The squeeze comes amid soaring inflation, compounded by the Russian invasion of Ukraine.

The Government will point to a package of support announced by Chancellor Rishi Sunak but already members of his own party have suggested he will need to announce more help.

Read more: Zahawi backs under-fire Sunak as Tories say more help is needed on eve of soaring bills

Read more: 'I didn’t think it would be this bad': Martin Lewis warns energy bills could exceed £2,500

And of no comfort to Brits trying to make ends meet, MPs today saw their pay climb by an extra £2,212 a year, taking their salary to £84,144.

Speaking on Wednesday ahead of the new price cap rise, money saving expert Martin Lewis said: "I didn't think it was going to be anywhere near as bad as this. I thought it was just going to be bad, I didn't think it would be catastrophic."

Citizens Advice chief executive Dame Clare Moriarty said: "The energy price cap rise will be potentially ruinous for millions of people across the country.

"The support announced so far from the Government simply isn't enough for those who'll be hit hardest.

"With the long-anticipated price rises now hitting, many more people will face the kind of heart-rending choices that our frontline advisers already see all too often."

The cap has risen by £693, as Ofgem, the regulator for the energy sector, allowed bills to climb to £1,791 – and further misery is expected this autumn when another increase is due.

Thursday saw a number of energy websites crash as millions of people tried to submit their meter readings to avoid being them wrongly estimated for their next bill.

E.ON, British Gas and EDF Energy's websites were affected by "unprecedented demand".

Europe entering 'unprecedented times' in energy crisis

Nadhim Zahawi, the education secretary, backed the government's cost-of-living support measures but admitted "we continue to keep a close eye" on the problem.

He told LBC's Tonight with Andrew Marr on Thursday: "I do think that making £22 billion available, £9 billion to help with energy costs, the balance of that targeted for local government - who know those families really well - doubling to a billion for just one year is a substantial amount of help that's going in for those families and of course we're not sitting back and saying job done.

Read more: Putin threatens to cut off Europe's gas supply tomorrow unless it's paid in roubles

"We continue to keep a close eye on what's happening. Inflation is a global battle."

The Government has introduced measures to try and ease the squeeze.

Mr Sunak, in his spring statement, kept the criticised 1.25 percentage point rise in National Insurance contributions but said the threshold will rise by £3,000.

Spring Statement was 'cloud cuckoo land'.

He also announced a cut to fuel duty in his spring statement.

In previously announced measures, households will get £200 knocked off their energy bills in October, but will need to pay that back at a rate of £40 over five years from 2023.

The Government also claims that 2.5 million people will benefit from the national living wage rise from Friday, with adults now earning £9.50 under the scheme.

However, with Mr Sunak getting heckled with a cry of "is that it" in the Commons when announcing a tranche of measures, members of his own party have suggested he will need to offer more.

Speaking separately on LBC's Tonight with Andrew Marr this week, former Tory leader Sir Iain Duncan Smith said Mr Sunak needed to "come back" with new ideas while ex-deputy Prime Minister Michael Heseltine said "it's cloud cuckoo land".

Nadhim Zahawi reacts to the Spring Statement

"The Chancellor said the public's finances are in a difficult situation, the debt is rising, and inflation is likely to force up interest rates,” he went on.

"All this talk about tax cuts, cutting public expenditure and all this sort of stuff is simply not real in the present circumstances.

"What is needed is a strategic plan to battle our way through by increasing the scale of the economy and economic activity and more government investment but there are no plans except in a limited number of places."

Labour has repeatedly called for a windfall tax on energy firms who have made big profits during the crisis.

Shadow chancellor Rachel Reeves told Mr Sunak: "For all his words, it is clear the Chancellor doesn't get the scale of the challenge. He talks about providing security for working families. But his choices are making the cost of living crisis worse - not better."

Meanwhile, some MPs have said they would not take their increased salary, donating money instead to worthy causes.

MPs' pay is set by the Independent Parliamentary Standards Authority.