Martin Lewis warns Brits in ‘squeezed middle’ face 41% rise on energy bills next winter
18 November 2022, 08:51
Martin Lewis warns Brits in ‘squeezed middle’ face 41pc rise on energy bills next winter
Personal finance expert Martin Lewis told LBC this morning that hard-press Brits in the "squeezed middle" face a 41% rise in energy bills next winter.
He told Nick Ferrari at Breakfast that the big difference for next winter is that people will lose the extra £400 in support for bills from the Government.
“This winter the rate for someone on ‘typical use’ is £2,100. Next winter, it’s going to be £3,000. That is an uplift in all bills of 40%.”
“Those who are in the squeezed middle… will both see an increase in their energy bills and won’t get the £400 help.
Marr: Sunak and Hunt's tricky accounting means it may fall to Labour to impose spending cuts
“That £3,000 for a typical house - that is an enormous whack. If you are earning £27,000 - £3,000 on energy alone is enormous.
“Those in the middle will see the biggest change and feel the biggest squeeze over the next year.”
Martin Lewis predicts what we're going to see next spring
Analysis from the Resolution Foundation that found tax rises would deliver a 3.7% income hit to typical households.
The think tank said the uprating of benefits in line with inflation would make a "huge difference to those on low-to-middle incomes", but the focus on "stealthy" tax threshold freezes to raise revenue would extend far beyond high earners.
"A typical household faces a permanent 3.7% income hit from these measures - the same as the top fifth of households - and bigger than the 3% income hit that the very top twentieth of households will face," the foundation said.
Jeremy Hunt set out his plans for £55 billion of tax hikes and spending cuts on Thursday against the backdrop of a bleak set of economic forecasts from the Office of Budget Responsibility (OBR), underlining the damage wreaked by the war in Ukraine.
It said that rampaging inflation as a result of the energy price shock meant living standards are set to fall by 7% over the next two years - taking them back to where they were in 2014.
The economy is predicted to contract by 1.4% next year, unemployment is expected to rise by more than 500,000 while taxes are set to reach their highest level as a share of national income since the end of the Second World War.
The Resolution Foundation also found that the budget would reverse much of the Government's levelling up agenda.
"The £15 billion of cuts to capital investment announced yesterday will undo 80% of the remaining increases in public investment announced by previous Chancellor Rishi Sunak, which underpinned the levelling-up agenda," it said.
Research director James Smith said Britain was getting poorer as an energy importer amid an energy price shock but "deciding how we do so was, to a significant extent, the choice facing the Chancellor".
"He has decided that households will do so with higher energy bills, higher taxes, and worse public services than previously expected. Whether or not making the choices was tough, the reality of living through the next few years will be," he said.
Earlier, Mr Hunt was warned by the think tank his planned spending cuts may prove "undeliverable" as he faced criticism from some senior Tories for raising taxes as he seeks to rebuild the UK's battered public finances.
The Resolution Foundation think tank said such cuts were "likely to be undeliverable" as they would require "years of holding down public sector wages below those in the private sector".
Former business secretary Jacob Rees-Mogg accused the Chancellor of taking the "easy option" in Thursday's autumn statement rather than bearing down harder on public spending.
He said the country needed lower taxes to drive up growth after Mr Hunt acknowledged that the UK was already in recession.
At the same time, independent analysts said Mr Hunt's promised spending cuts would mean a prolonged squeeze on public sector pay despite a growing clamour in many services for real-terms increases after the years of austerity.
The Institute for Fiscal Studies (IFS) said delaying the difficult decisions as to where the axe will fall until after the next general election would "stretch credulity" and questioned whether they would actually happen.
