'A catastrophe - I'm begging you to help': Martin Lewis pleads for next PM to act after price cap hikes to £3,500
26 August 2022, 07:02 | Updated: 26 August 2022, 11:06
Britain's cost of living crisis has worsened as Ofgem announced its price cap will hike to £3,549 a year, in what money saving expert Martin Lewis told LBC is a "catastrophe".
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It leaves squeezed Brits facing a hefty increase in their energy bills amid demands for the Government to do more. The new cap is a massive 80% rise from April's £1,971.
Both the Government and Ofgem, the energy regulator which sets the cap, laid the blame firmly at Vladimir Putin's feet, as Russia tries to drive up gas prices in a bid to break Western support for Ukraine in his bloody invasion.
The new cap will be apply from October. Poverty campaigners warned it would have a serious impact on children while Ofgem's boss called on the next Prime Minister to to "act further".
And money saving expert Mr Lewis told LBC's James O'Brien: "I have catastrophised this because it is a catastrophe. I'm now begging and pleading with whomever the new Prime Minister is. It should have been dealt with far sooner."
"I am here to beg, to plead, to pray that our new Prime Minister understands how urgent this is and, while we've left it late, on the 5th of September, on that day, lays out concrete plans that will stop a sizeable chunk of our population having genuine health risks because of lack of food and heat due to this horrible expense, and another sizeable chunk of lower and middle earners from having the catastrophic impact on their standard of living."
He said there is "there is no cutting back, there is no money saving expert - you could put me, someone who's been doing this for 20 years, into one of those households and do every bit of magic and trick in the book and I would not even get close to scratching the sides of what is needed here".
Martin Lewis says how he'd stop rising energy bills.
He added: "I am deliberately being agnostic on the mechanism. The mechanism could be a social tariff, it could be freezing the price cap, it could be just over doubling what the handouts in May were.
"I don't care because if I can look at the specific solution… then what we get into is does that solution work, that's irrelevant. This is not about the mechanics, it's about the political will."
Jonathan Brearley, CEO of Ofgem, said: "We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
"The price of energy has reached record levels driven by an aggressive economic act by the Russian state.
"They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.
"The Government support package is delivering help right now, but it's clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.
"We are working with ministers, consumer groups and industry on a set of options for the incoming Prime Minister that will require urgent action.
"The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this."
Becca Lyon, head of child poverty at Save the Children, said the hike was "a full-blown economic crisis for thousands of families" that would put "children... at serious risk".
Chancellor Nadhim Zahawi said: "I know the energy price cap announcement this morning will cause stress and anxiety for many people, but help is coming with £400 off energy bills for all, the second instalment of a £650 payment for vulnerable households, and £300 for all pensioners.
"While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support.
"This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible."
Ex-Ofgem chief explains energy price cap
Liz Truss, the front runner in the Tory leadership contest, has pledged to unveil an emergency budget in September.
"She will immediately take action to put more money back in people's pockets by cutting taxes and suspending green energy tariffs.
"This is on top of ongoing work such as the Energy Bills Support Scheme, which will see a £400 discount paid to consumers from October, and the £1,200 package of support for the most vulnerable.
"Liz will work flat-out to deliver long term energy affordability and security, unleashing more energy by maximising our North Sea oil and gas production - helping keep bills down in the future."
But the campaign said it would not be right to announce the full plan before the leadership fight, which she is expected to win, is over or until she has seen all the analysis in Whitehall.
The protracted Tory leadership contest, played out against a backdrop of soaring inflation, has come under fire.
There have been calls for Boris Johnson, the lame duck Prime Minister, to thrash out a plan with Ms Truss and her opponent, the former chancellor Rishi Sunak.
