Families cry for help as govt considers 'up to £500 cash payouts' to ease cost of living

21 January 2022, 08:18 | Updated: 21 January 2022, 14:50

Adrian spoke of his troubles as energy bills soar
Adrian spoke of his troubles as energy bills soar. Picture: Handout
Rachael Venables

By Rachael Venables

Families have hit out at "scandalous" soaring energy prices as US-style cash payments are being considered by the government for those hardest hit by the soaring cost of living.

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While politicians row about parties, the cost of living is fast becoming the country's biggest political crisis, LBC's correspondent Rachael Venables writes.

It's feared energy prices could rise again in October, even after a predicted jump of 50% for millions of struggling households this spring.

Chancellor Rishi Sunak is now said to be considering handing one-off sums of money to those struggling with soaring bills, in plans first reported by The Sun.

The Treasury is investigating whether a one-off payment to the poorest households may be a better solution than slashing VAT on energy bills, which the Chancellor is reportedly concerned would give financial aid to richer households who do not need it.

Read more: Cost of living crisis: Prices rise at fastest pace for 30 years

Read more: Soaring energy bills will 'devastate' families as cost of living continues to squeeze

Emma Pinchbeck, the chief executive of Energy UK, said Ofgem's price cap could increase to £2,400 in October following an increase to "around £2,000" in April.

"We haven't seen anything like this, not in my career or in any of the people who sit on my board."

The rocketing wholesale price of gas has already forced dozens of energy firms to go bust, pushing their customers onto higher tariffs, and many families are already struggling.

Adrian's an unpaid carer and dad-of-two from Dudley. Rahul's a civil servant from Lancashire who just bought his first home.

Both men are united in just having seen their energy bills double overnight, after their energy providers collapsed at the end of last year.

Rahul's energy bill has gone from £150 to £300 a month. Adrian's was £80, it's now an eye-watering £220.

"Life's a pinch now," Adrian tells me.

His six-year-old daughter's got disabilities, so he says they spend a lot of money on pull-ups and special food her.

Read more: Cost of living crisis: Axe VAT on energy bills to save people £600, says Labour

Now his bills have rocketed, they've been forced to cut out 'all luxuries;' no more trips to the pub he tells me, just the essentials.

"We're just managing as best we can."

Rahul's got a similar story.

"I've got two young children, one's a new-born. It's mainly leisure activities we've had to cut out, so cancelling gym memberships and days out with the children. We're trying to walk places instead of driving because fuel is so expensive. I've just adapted to a new diet myself - trying to eat the least expensive food as possible."

Rahul and his family.
Rahul and his family. Picture: Supplied by family

But, as bad as things are now, both men are really worried about what's coming next, with energy industry bosses warnings bills could jump by as much as 50% again in the Spring, followed by another hike again, in the Autumn.

Rahul, who's never struggled with his mental health before, is now experiencing anxiety and sleepless nights.

Both are desperate for more help from the Government, and they don't care what form it comes in.

Adrian says: "I'd tell them to stop fighting amongst themselves, get a grip and come up with a plan."

Inflation rose again this week to its highest point in 30 years, making this "cost of living crisis" the biggest political issue facing the Government that didn't start with a Downing Street bash.

The price of every-day items will keep going up, and with tax hikes used to fund the NHS, many families are fearing the worst.

To solve the energy crisis, Labour wants the Government to remove the VAT on energy bills, saving 5%.

But Angela Terry, Green Consumer Expert, says even that doesn’t go far enough, she believes the solution no-one is talking about is insulation:

"There's millions and millions of homes that don't have insulation, it's a scandal but no one out there publicising it or encouraging people to do it."

“The Government have had a couple of schemes in the past to insulate properties, and unfortunately there is nothing out there at the moment unless you’re on benefits or in a housing association. Sa for the two thirds of families out there who are struggling, there is nothing to help them insulate their homes.”

"The cheapest energy is the energy you don't use."