New analysis published by the TUC today (12 Aug) shows that energy bills are now expected to cost more than two months of average take-home pay in 2023 – unless the government intervenes.
Average take-home pay (after tax) will be £2,054 per month in 2023 based on Bank of England forecasts, so at £4,108, two months’ pay will be less than the £4,200 predicted cost of energy bills per household in 2023.
The union body is publishing proposals today that it says should form the basis of this emergency support, along with a longer term plan to prevent similar future crises.
A pandemic-scale emergency
The TUC is calling on the government to bring trade union and business leaders into the Treasury to devise an urgent response to the crisis together – just as happened during the pandemic.
This approach led to the highly successful furlough scheme, which protected jobs, families and businesses.
In the early days of the pandemic, the TUC had published proposals for a furlough scheme that became a central part of emergency pandemic support.
‘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 eyewatering 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.’
TUC general secretary
Urgent help for families
Today the union body is publishing proposals for urgent cost of living support. It wants to stop the October energy price cap increase, uprate the minimum wage, universal credit and state pension in October and fund pay rises in the public sector that keep up with inflation.
Without intervention, the typical family bill will rise by £1,500 from October. The TUC wants the government to step in to cover the cost of the increase in full – at an estimated cost of £38.5bn.
The revenue raised from the windfall tax can be significantly increased to help cover this cost – but this must not be a no-strings handout to energy retailers. Instead, government should reform the energy system, taking the energy retailers into public ownership and requiring new pricing structures that make basic energy needs affordable.