Connect with us

Published

on

The reduction in the Ofgem price cap that will apply from April may be the final step on the long, ruinously expensive road to a new normal for consumer energy prices. 

The guide price for typical annual dual-tariff use of £1,690 – a fall of 12.3% from the previous cap – is a dramatic reduction from the peak of more than £4,000 that applied just a year ago and prompted multi-billion pound state support for every household in the country.

After bouncing between £1,800 and just shy of £2,000 in the three quarters since last June, this reduction, taken with projections of a further drop to around £1,500 in three months, could represent the floor for post-Ukraine invasion prices.

To be clear, a price that’s still considerably higher than the £993 we expected to pay in the winter of 2020-21 represents a dramatic, material and permanent increase in the cost of living, and a return to that level is unlikely as long as Russia is a global pariah at war.

Energy markets may look becalmed but volatility is in their nature.

Read more:
What is the price cap – and how will it affect my bills?

Energy price volatility temporarily subsides

More on Cost Of Living

A warm, wet winter helped UK domestic gas demand fall 16% in 2023 compared to the pre-war average, but the weather has flattered UK energy security.

Much of the flow of gas from Russia has been replaced by liquid natural gas from Australia, the US and Qatar, and pipelines from Norway, all ostensibly friendlier nations, but the UK remains exposed to the kindness of strangers to heat homes and fire power stations.

The long-term answer is low-carbon and renewable energy sources, but while Vladimir Putin has provided the clearest motivation yet to accelerate, the transition has become significantly more expensive than anticipated.

The offshore wind industry in particular has had a brutal year with supply chain resources finite and finance, like power, no longer cheap.

For consumers, however, this lull may signal the return of a functioning competitive market among suppliers.

Since Russian tanks rolled into Ukraine the Ofgem figure has been a cap in name only.

In practice, it’s been a universally applied maximum charge, with the taxpayer picking up the balance of every pound over £2,500.

Lower wholesale prices, helped by the caprice of a mild winter, mean suppliers may have to work a little harder for your custom.

British Gas is already offering a fixed price guaranteed at £1 below the April price cap, while E.On is offering a 3% discount on the cap for a year.

Not much compared to the wild (and entirely unsustainable market) that existed before the war, but it is a start.

More than billpayers welcoming the fall

The reduction will be welcome at the Treasury too. Having set the precedent of paying our energy bills and allowing the national debt to balloon close to 100% of GDP in the process, there is no appetite to return to feeding the national meter.

With the cap now around half the more than £3,100 that applied in April last year there will be downward pressure on inflation too, though don’t expect the Bank of England to rush to cut rates as a consequence.

The biggest annual reduction in bills was factored into the figures for last October, helping drag CPI down from its 11% peak, and the Bank of England is already looking ahead to when the gravitational pull of energy prices falls out of the figures and secondary factors start to drive the headline rate.

There may also now be space for Ofgem and ministers, election permitting, to examine some of the remaining obvious flaws in the domestic market.

Electricity remains almost four times more expensive per unit than gas thanks to green taxes, despite gas being the fuel we need to remove from the network if net zero and energy security are genuine goals.

If the government is serious about incentivising the decarbonisation of home heating with heat pumps – an open question – these running costs will have to be addressed alongside installation grants.

And standing charges remain a regressive charge for billpayers, with electricity costing more than £3.50 a week before you have turned a light on, though the new cap makes that a slightly less terrifying prospect than a year ago.

Continue Reading

UK

Labour accused of another manifesto breach after major workers’ rights U-turn

Published

on

By

Labour accused of another manifesto breach after major workers' rights U-turn

The Labour government is facing accusations of two manifesto breaches in as many days after turning its back on a promise to protect workers from unfair dismissal from day one in a job.

A day after Rachel Reeves confirmed an extended freeze on income tax thresholds that critics said amounted to a manifesto-breaching tax hike on working people, the business secretary announced a key measure in the flagship Employment Rights Bill would be watered down.

The qualifying period for unfair dismissal is currently two years, and Labour said in their manifesto they would bring it down to one day.

But Peter Kyle announced on Thursday it would now be six months, having faced opposition from businesses.

Mr Kyle defended the change, insisting “compromise is strength”, but Tory leader Kemi Badenoch described it as “another humiliating U-turn” and a number of Labour MPs aren’t happy.

Andy McDonald, MP for Middlesbrough and Thornaby East, branded the move a “complete betrayal”, while Poole MP Neil Duncan-Jordan said the government had “capitulated”.

Former employment minister Justin Madders, who was sacked in Sir Keir Starmer’s reshuffle earlier this year, also disputed claims the move did not amount to a manifesto breach.

“It might be a compromise,” he said, “but it most definitely is a manifesto breach.”

What did the manifesto say?

The Employment Rights Bill was a cornerstone of Labour’s 2024 election manifesto, and also contains measures that would ban zero-hours contracts.

The party manifesto promised to “consult fully with businesses, workers, and civil society on how to put our plans into practice before legislation is passed”.

“This will include banning exploitative zero-hours contracts; ending fire and rehire; and introducing basic rights from day one to parental leave, sick pay, and protection from unfair dismissal,” it said.

Angela Rayner was a key driver of the bill before she left cabinet, but Peter Kyle (below) is now calling the shots. Pic: PA
Image:
Angela Rayner was a key driver of the bill before she left cabinet, but Peter Kyle (below) is now calling the shots. Pic: PA

Pic: Reuters
Image:
Pic: Reuters

How did we get here?

But the legislation – which was spearheaded by former deputy prime minister Angela Rayner – has been caught in parliamentary ping pong with the House of Lords.

Last month, some peers objected to the provisions around unfair dismissal, suggesting they would deter some businesses from hiring.

They also opposed Labour’s move to force employers to offer guaranteed hours to employees from day one, arguing zero-hour contracts suited some people.

Ministers said reducing the qualifying period for unfair dismissal turned the bill into a “workable package”.

Read more:
Budget 2025: The key points at a glance
Starmer insists Labour ‘kept to our manifesto’

Please use Chrome browser for a more accessible video player

Employment Rights Bill is ‘anti-growth blueprint’

Businesses have largely welcomed the change, but unions gave a more hostile response.

Sharon Graham, the general secretary of Unite, said the bill was now a “shell of its former self”.

“With fire and rehire and zero-hours contracts not being banned, the bill is already unrecognisable,” she said.

The TUC urged the House of Lords to allow the rest of the legislation to pass.

Paul Nowak, the general secretary, said: “The absolute priority now is to get these rights – like day one sick pay – on the statute book so that working people can start benefitting from them from next April.”

‘Strikes the right balance’

The Resolution Foundation said the change in the unfair dismissal period was a “sensible move that will speed up the delivery of improvements to working conditions and reduce the risk of firms being put off hiring”.

It said the change “strikes the right balance between strengthening worker protections and encouraging businesses to hire” and deliver “tangible improvements to working conditions”.

The Confederation of British Industry (CBI) added: “Businesses will be relieved that the government has agreed to a key amendment to the Employment Rights Bill, which can pave the way to its initial acceptance.

“This agreement keeps a qualifying period that is simple, meaningful and understood within existing legislation.

“It is crucial for businesses confidence to hire and to support employment, at the same time as protecting workers.”

Continue Reading

UK

Budget 2025: Reeves urged to ‘make the case’ for income tax freeze – as PM hits out at defenders of ‘failed’ policy

Published

on

By

Budget 2025: Reeves urged to 'make the case' for income tax freeze - as PM hits out at defenders of 'failed' policy

Rachel Reeves needs to “make the case” to voters that extending the freeze on personal income thresholds was the “fairest” way to increase taxes, Baroness Harriet Harman has said.

Speaking to Sky News political editor Beth Rigby on the Electoral Dysfunction podcast, the Labour peer said the chancellor needed to explain that her decision would “protect people’s cost of living if they’re on low incomes”.

In her budget on Wednesday, Ms Reeves extended the freeze on income tax thresholds – introduced by the Conservatives in 2021 and due to expire in 2028 – by three years.

The move – described by critics as a “stealth tax” – is estimated to raise £8bn for the exchequer in 2029-2030 by dragging some 1.7 million people into a higher tax band as their pay goes up.

Rachel Reeves, pictured the day after delivering the budget. Pic: PA
Image:
Rachel Reeves, pictured the day after delivering the budget. Pic: PA

The chancellor previously said she would not freeze thresholds as it would “hurt working people” – prompting accusations she has broken the trust of voters.

During the general election campaign, Labour promised not to increase VAT, national insurance or income tax rates.

Sir Keir Starmer has insisted there’s been no manifesto breach, but acknowledged people were being asked to “contribute” to protect public services.

He has also launched a staunch defence of the government’s decision to scrap the two-child benefit cap, with its estimated cost of around £3bn by the end of this parliament.

Please use Chrome browser for a more accessible video player

Prime minister defends budget

‘A moral failure’

The prime minister condemned the Conservative policy as a “failed social experiment” and said those who defend it stand for “a moral failure and an economic disaster”.

“The record highs of child poverty in this country aren’t just numbers on a spreadsheet – they mean millions of children are going to bed hungry, falling behind at school, and growing up believing that a better future is out of reach despite their parents doing everything right,” he said.

The two-child limit restricts child tax credit and universal credit to the first two children in most households.

The government believes lifting the limit will pull 450,000 children out of poverty, which it argues will ultimately help reduce costs by preventing knock-on issues like dependency on welfare – and help people find jobs.

Please use Chrome browser for a more accessible video player

Budget winners and losers

Speaking to Rigby, Baroness Harman said Ms Reeves now needed to convince “the woman on the doorstep” of why she’s raised taxes in the way that she has.

“I think Rachel really answered it very, very clearly when she said, ‘well, actually, we haven’t broken the manifesto because the manifesto was about rates’.

“And you remember there was a big kerfuffle before the budget about whether they would increase the rate of income tax or the rate of national insurance, and they backed off that because that would have been a breach of the manifesto.

“But she has had to increase the tax take, and she’s done it by increasing by freezing the thresholds, which she says she didn’t want to do. But she’s tried to do it with the fairest possible way, with counterbalancing support for people on low incomes.”

Read more:
Labour’s credibility might not be recoverable
Budget 2025 is a big risk for Labour’s election plans

She added: “And that is the argument that’s now got to be had with the public. The Labour members of parliament are happy about it. The markets essentially are happy about it. But she needs to make the case, and everybody in the government is going to need to make the case about it.

“This was a difficult thing to do, but it’s been done in the fairest possible way, and it’s for the good, because it will protect people’s cost of living if they’re on low incomes.”

Continue Reading

UK

Prostate cancer: NHS screening programme could come one step closer today

Published

on

By

Prostate cancer: NHS screening programme could come one step closer today

An NHS screening programme for prostate cancer could come one step closer if it’s backed today by a key committee that advises the government.

The National Screening Committee, comprised of doctors and economists, will reveal whether it now believes the benefits of screening outweigh any risks, and whether testing could be done at a reasonable cost to the NHS.

When it last looked at the evidence in 2020, it rejected calls for screening, even though prostate cancer kills 12,000 men a year.

But in recent months, there has been growing pressure for screening from high-profile public figures such as Olympian Sir Chris Hoy and former Sky News presenter Dermot Murnaghan.

Both have been diagnosed with advanced prostate cancer, yet the disease is curable if detected in its early stages.

Please use Chrome browser for a more accessible video player

Sir Chris Hoy and Dermot Murnaghan on facing cancer

Former prime minister David Cameron has also backed the campaign for screening this week after revealing he had been treated for the cancer.

The committee will decide whether new research has tipped the scales in favour of screening older men, or whether to target only those at higher risk, such as black men and those with a family history of the disease.

The case for…

Lithuania is currently the only country to screen all men aged 50-69 with a blood test for PSA, a protein released by prostate cells.

A low level is normal. But levels can rise steeply in men with cancer.

A recent study showed that regular PSA testing of men over 50 could reduce deaths by 13%.

That’s about the same survival benefit of breast screening.

Please use Chrome browser for a more accessible video player

Cameron treated for prostate cancer

…and the case against

But the PSA blood test isn’t completely reliable.

One in seven men with prostate cancer actually have a normal PSA level.

And even those with a high level may have a cancer that is so slow growing that it’s just not a threat.

That’s why the National Screening Committee has warned in the past that PSA screening could lead men to have surgery or other treatment that they don’t actually need. Treatment can result in incontinence or impotence.

But the evidence has moved on.

These days men with a high PSA should have an MRI scan of their prostate, which significantly reduces the risk of unnecessary treatment. And the treatment itself is getting safer.

But the committee may judge that the risks and benefits of screening all men in their 50s and 60s are still too finely balanced to give the go-ahead.

They may wait for results from the Transform trial, which has just been launched and will compare different screening strategies. That could take many years.

Please use Chrome browser for a more accessible video player

‘When I was diagnosed, it was too late’

Read more from Sky News:
TGI Fridays’ UK chain up for sale
U-turn over unfair dismissal policy

But campaigners are hopeful that the committee will recommend the screening of men at higher risk of prostate cancer in the meantime.

Black men have twice the risk of those from other ethnic groups.

Men whose father or brothers have had prostate cancer are two and a half times the risk.

And there is also an increased risk for men whose mother or sisters have had breast or ovarian cancer.

Roughly 1.3 million men fall into one of the risk groups.

But identifying and inviting them for screening could prove tricky. GPs don’t always note a patient’s ethnicity in their medical records, and they would usually only know about a patient’s family history if they have been told.

If the committee recommends screening in some form, it is likely to go out to a public consultation before landing on the desk of Health Secretary Wes Streeting for a final decision.

Ultimately, it is his call whether at least some men are screened for what is now the most common cancer in England.

Continue Reading

Trending