Martin Lewis fears energy bills could soar by 'catastrophic' 40%

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·Political Correspondent - Yahoo News UK
·4-min read
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Money Saving Expert's Martin Lewis during a joint press conference with Facebook at the Facebook headquarters in London.
Martin Lewis has described soaring energy prices as a 'catastrophic' situation. (PA Images)

Martin Lewis has urged the government to step in and support consumers amid the growing energy crisis.

Wholesale prices for gas have surged 250% since January, which is having a dramatic knock-on effect on consumers and businesses. 

Factors including low gas storage stocks, a higher-than-usual demand in gas from Asia, and a lower-than-usual supply in gas from Russia have triggered the soaring prices. 

Amid calls for the government to step in and bail out struggling suppliers, Money Saving Expert founder Lewis said consumers will also need help to deal with a spike in bills.

Watch: Will my energy bills rise?

"There will be many people making the devastating choice between heating and eating," the financial journalist said. 

“The government is talking about intervening with energy companies, it needs to intervene with consumers as well.”

In a video on Twitter, Lewis shared his concerns

"We already have the Universal Credit extra £20 uplift disappearing, furlough disappearing, the self-employment grants disappearing," he said.

"Inflation is at a high – this is a terrible time for people's finances, and now we have this energy prices rise."

Money Saving Expert's Martin Lewis speaks to the media after a joint press conference with Facebook at the Facebook headquarters in London.
Martin Lewis has urged the government to support businesses as well as customers to get through the gas crisis. (PA Images)

He warned that some people who have previously fixed into cheap energy deals may see their bills surge by as much as 40% when they come off them.

“The situation is catastrophic, in a way we have never seen before.” 

Business secretary Kwasi Kwarteng told parliament energy supplies would not run out, a cap on energy prices would remain in place, and the government would seek to protect vulnerable consumers. 

LONDON, UNITED KINGDOM - FEBRUARY 06, 2020: Minister of State for Business, Energy and Clean Growth Kwasi Kwarteng leaves 10 Downing Street in central London after attending a Cabinet meeting on 06 February, 2020 in London, England.- PHOTOGRAPH BY Wiktor Szymanowicz / Barcroft Media (Photo credit should read Wiktor Szymanowicz/Barcroft Media via Getty Images)
Business secretary Kwasi Kwarteng said the government would protect vulnerable customers. (Getty Images)

"Our priority in this situation has to be the consumer, the great British public, and the cap has done that effectively," he said.

"It protects and has protected millions of customers from sudden increases in global prices this winter.

“We’re committed to that price cap and it’ll remain in place."

Kwarteng also cited schemes such as the winter fuel allowance and the warm home discount as ways in which the government will help protect vulnerable customers and those on low incomes. 

However, Lewis has warned that a rise in prices will inevitably push up the cap, which is already set to rise to £1,277 on 1 October. 

“Prices have exploded since then, again. So the price cap will change in six months," he said. 

Lisa Barber, home products and services editor at Which?, said customers may want to consider switching energy provider now for some stability. 

Read more:
UK energy crisis: will bills go up?
How to protect yourself from rising energy prices 

“Deals at the level of the price cap may soon be among the best available – but there is a risk that, if the crisis continues, anyone who stays on a standard variable tariff could see another substantial price hike after the cap is reassessed early next year," she said.

“Anyone wanting to switch their energy deal, for example those on a standard variable tariff, may want to switch now to ensure they have some stability for the year ahead, as it is still possible to find competitively priced fixed rate deals.”

Shadow business secretary Ed Miliband expressed concern that soaring energy prices coinciding with benefit cuts and tax rises would hit those on low incomes hardest.

Labour's shadow business secretary Ed Miliband speaking during the debate on the Internal Market Bill in the House of Commons, London. (Photo by House of Commons/PA Images via Getty Images)
Shadow business secretary Ed Miliband told parliament that people on low incomes faced a 'triple whammy' of soaring gas prices, national insurance hikes, and a Universal Credit cut. (PA Images via Getty Images)

"Families are facing a triple whammy: rising energy prices, national insurance rises and, at the end of this month, the £1,000 cut in Universal Credit," he told the House of Commons. 

"Mr Speaker, these energy price rises turn the indefensible decision on Universal Credit into an unconscionable one.”

The cut to Universal Credit has become an explosive issue over recent months, with some predictions saying it will push 800,000 into poverty, and several former Tory work and pensions secretaries opposing it.

Watch: Why gas prices have soared

 

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