Millions to be cut off from gas and electricity this winter as energy bill debt continues to rise
Millions will be cut off from gas and electricity services this winter, as new research from Citizens Advice details the extent to which households are affected by the inability to afford prepayment power top-ups.
The independent, state-funded advice service has said its advisers are helping more people than ever who cannot pay for energy. This winter is expected to be the busiest ever for people who cannot afford meter payments.
The number of people in energy bill debt has topped 5.3 million, according to its research. Being in debt means people are at risk of having a prepayment meter forcibly installed in their home, which they may not be able to afford to top up.
Such installation of meters has recommenced after a temporary pause following outrage when an undercover investigation by The Times revealed major energy companies were installing meters in the homes of vulnerable users.
It comes as the energy price cap has risen this month, bringing prices up, and Citizens Advice data says 800,000 people went more than 24 hours without gas or electricity in 2023 because they could not afford top-ups.
The research also says 1.7 million people were disconnected at least once a month last year.
Read more:
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Ofgem shares energy bills advice
Citizens Advice chief executive Dame Clare Moriarty said: “The government has not provided new energy bill support for those in need and has run out of time to develop the long-term approach it promised by April 2024.
“Without immediate action, we risk re-running this same crisis every winter.”
To keep meters topped up and gas and electricity serving homes, nearly three million people are part of households that have skipped meals, cut back on food spending, or sold or pawned items in the last year.
Of particular concern, Citizens Advice says, are the households with children under four, who are twice as likely to be in debt and be forced to disconnect from gas and electricity supplies, compared with those who do not have children.
However, new rules on force-fitting prepayment meters only limit installations for households with children under two.
More broadly, the survey says one in four cannot afford essential bills while one in 10 households had to borrow money in the past six months to pay energy bills.
Half of those in energy bill debt surveyed by Citizens Advice for the research are trying to meet payments by turning off the heat.
Energy debt has hit a record £2.9bn, the service added.
A spokesperson for Ofgem, the independent energy regulator, said: “Ofgem shares the concerns of Citizens Advice about the issue of rising debt and customers self-disconnecting from their energy supply amid the wider cost of living pressures.
“We already have introduced tougher rules to make sure that energy companies do more to spot the signs when a customer may be struggling and step in to offer support, including working out affordable payment plans and providing emergency credit to reduce the risk of self-disconnection.
“We work closely with Citizens Advice and other consumer groups and charities to address the issues people are facing and we will continue to explore more options to help struggling and vulnerable customers.”
A spokesperson for the Department for Energy Security and Net Zero said: “We recognise the cost of living challenges families are facing, which is why we are spending £104bn supporting households with their bills.
“While energy prices are lower than last winter, our Energy Price Guarantee remains in place to protect people until April, and we encourage anyone experiencing difficulties with their energy bills to speak with their supplier.
“We’re also continuing to support the most vulnerable, with three million households expected to benefit from the £150 Warm Home Discount, £900 for those on means-tested benefits, and an extra £150 for disabled people.”
The cyber attack on Jaguar Land Rover (JLR), which halted production for nearly six weeks at its sites, cost the company roughly £200m, it has been revealed.
Latest accounts released on Friday showed “cyber-related costs” were £196m, which does not include the fall in sales.
Profits took a nose dive, falling from nearly £400m (£398m) a year ago to a loss of £485m in the three months to the end of September.
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Revenues dropped nearly 25% and the effects may continue as the manufacturing halt could slow sales in the final three months of the year, executives said.
The impact of the shutdown also hit factories across the car-making supply chain.
Slowing the UK economy
The production pause was a large contributor to a contraction in UK economic growth in September, official figures showed.
Had car output not fallen 28.6%, the UK economy would have grown by 0.1% during the month. Instead, it fell by 0.1%.
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How cyber attack ‘effectively hacked GDP’
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Reacting to JLR’s impact on the GDP contraction, its chief financial officer, Richard Molyneux, said it was “interesting to hear” and it “goes to reinforce” that JLR is really important in the UK economy.
The company, he said, is the “biggest exporter of goods in the entire country” and the effect on GDP “is a reflection of the success JLR has had in past years”.
Recovery
The company said operations were “pretty much back running as normal” and plants were “at or approaching capacity”.
Production of all luxury vehicles resumed.
Investigations are underway into the attack, with law enforcement in “many jurisdictions” involved, the company said.
When asked about the cause of the hack and the hackers, JLR said it was not in a position to answer questions due to the live investigation.
A run of attacks
The manufacturer was just one of a number of major companies to be seriously impacted by cyber criminals in recent months.
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Are we in a cyber attack ‘epidemic’?
High street retailer Marks and Spencer estimated the cost of its IT outage was roughly £136m. The sum only covers the cost of immediate incident systems response and recovery, as well as specialist legal and professional services support.
The Co-Op and Harrods also suffered service disruption caused by cyber attacks.
Four people were arrested by police investigating the incidents.
Sir Keir Starmer and Rachel Reeves have scrapped plans to break their manifesto pledge and raise income tax rates in a massive U-turn less than two weeks from the budget.
The decision, first reported in the Financial Times, comes after a bruising few days which has brought about a change of heart in Downing Street.
Read more: How No 10 plunged itself into crisis
I understand Downing Street has backed down amid fears about the backlash from disgruntled MPs and voters.
The Treasury and Number 10 declined to comment.
The decision is a massive about-turn. In a news conference last week, the chancellor appeared to pave the way for manifesto-breaking tax rises in the budget on 26 November.
She spoke of difficult choices and insisted she could neither increase borrowing nor cut spending in order to stabilise the economy, telling the public “everyone has to play their part”.
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‘Aren’t you making a mockery of voters?’
The decision to backtrack was communicated to the Office for Budget Responsibility on Wednesday in a submission of “major measures”, according to the Financial Times.
The chancellor will now have to fill an estimated £30bn black hole with a series of narrower tax-raising measures and is also expected to freeze income tax thresholds for another two years beyond 2028, which should raise about £8bn.
Tory shadow business secretary Andrew Griffith said: “We’ve had the longest ever run-up to a budget, damaging the economy with uncertainty, and yet – with just days to go – it is clear there is chaos in No 10 and No 11.”
How did we get here?
For weeks, the government has been working up options to break the manifesto pledge not to raise income tax, national insurance or VAT on working people.
I was told only this week the option being worked up was to do a combination of tax rises and action on the two-child benefit cap in order for the prime minister to be able to argue that in breaking his manifesto pledges, he is trying his hardest to protect the poorest in society and those “working people” he has spoken of so endlessly.
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Ed Conway on the chancellor’s options
But days ago, officials and ministers were working on a proposal to lift the basic rate of income tax – perhaps by 2p – and then simultaneously cut national insurance contributions for those on the basic rate of income tax (those who earn up to £50,000 a year).
That way the chancellor can raise several billion in tax from those with the “broadest shoulders” – higher-rate taxpayers and pensioners or landlords, while also trying to protect “working people” earning salaries under £50,000 a year.
The chancellor was also going to take action on the two-child benefit cap in response to growing demand from the party to take action on child poverty. It is unclear whether those plans will now be shelved given the U-turn on income tax.
A rough week for the PM
The change of plan comes after the prime minister found himself engulfed in a leadership crisis after his allies warned rivals that he would fight any attempted post-budget coup.
It triggered a briefing war between Wes Streeting and anonymous Starmer allies attacking the health secretary as the chief traitor.
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Wes Streeting: Faithful or traitor? Beth Rigby’s take
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The prime minister has since apologised to Mr Streeting, who I am told does not want to press for sackings in No 10 in the wake of the briefings against him.
But the saga has further damaged Sir Keir and increased concerns among MPs about his suitability to lead Labour into the next general election.
Insiders clearly concluded that the ill mood in the party, coupled with the recent hits to the PM’s political capital, makes manifesto-breaking tax rises simply too risky right now.
But it also adds to a sense of chaos, given the chancellor publicly pitch-rolled tax rises in last week’s news conference.
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