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Gas and electricity bills are going up as the new energy price cap takes effect.

You may have read that from 1 October the price cap will mean average energy bills will increase by 27% from £1,971 a year to £2,500.

But it isn’t as simple as that.

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What is happening?

The price of gas and electricity is determined by global wholesale prices, which shot up after supplies from Russia were cut as a response to the war in Ukraine – and after energy consumption increased again after COVID.

How much these wholesale energy prices are passed on to customers is controlled by the UK regulator Ofgem in the form of a price cap four times a year.

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This price cap limits the cost households pay per unit of energy (kilowatt hours) they use.

Average annual bills had been touted to go up to £3,549 in line with wholesale prices, but Prime Minister Liz Truss’s “energy price guarantee” has reduced the original price cap announced on 26 August.

It means that from 1 October, instead of paying a maximum of 28p per kWh for electricity – people will now pay 34p.

And instead of paying a maximum of 7p per kWh for gas – they will now pay 10.3p.

Standing charges, which are the cost of connecting to the National Grid, are also going up with the price cap, but not by very much.

From now they will increase from 45p a day to 46p a day for electricity and 27p to 28p for gas.

Does the price cap cover everyone?

The price cap only covers domestic households in England, Wales and Scotland. The same level of support will be applied to the market in Northern Ireland.

Traditionally businesses are not covered by the price cap, but as part of a separate “energy bill relief” scheme, the government is providing additional support for firms.

You will be included in the price cap if you are a dual-fuel customer (use the same company for electricity and gas) on a standard variable tariff, who pays by direct debit, credit, or prepaid meter.

Standard variable tariffs mean your energy company can change the price per unit at any time – in line with global wholesale prices – but is limited by the price cap.

Fixed tariffs are agreed upon annually and mean the price per unit will not change for that year.

These are not included in the price cap, but the government says its energy price guarantee will mean a discount of 17p per kWh for electricity and 4.2p per kWh for gas.

They say this will bring fixed rates down to similar levels as the energy price cap.

If you are locked into an expensive fixed tariff, you can take a meter reading before 1 October to ensure your energy company honours the price guarantee discount.

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PM announces £2,500 average price cap

Price cap does not mean energy only costs £2,500 a year

The government estimates that the new price cap will result in average annual energy bills increasing from £1,971 to £2,500.

But that does not mean people won’t be charged more than £2,500 a year for their energy – it is just an estimate for a typical household.

According to Ofgem, a typical household in Britain has 2.4 people living in it – who use 242 kWh of electricity and 1,000 kWh of gas a month.

But all households are different – and their energy usage will depend on how many people live there, what time of day they use the most energy, and how energy efficient their home is.

For example, the government estimates that if you live in a purpose-built flat your average bill will be £1,750.

If you live in a mid-terraced house it will be around £2,350.

Those who live in semi-detached houses will pay around £2,650 a year.

And detached properties will pay roughly £3,300 annually.

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How to save on energy bills

What extra help is the government offering?

Before Liz Truss was appointed prime minister, former Chancellor Rishi Sunak announced all households would receive a £400 discount on their energy bills between October 2022 and March 2023.

From 1 October people will start to receive a £66 discount for October, another for November, and £67 for December, January, February and March.

Some energy companies are directly applying these to bills, while others will credit the amount to customers’ bank accounts.

Eight million households in receipt of certain benefits will also get £650 to help with their bills.

Pensioners will receive £300 and some people on special disability benefits will get £150.

People on low incomes and pensioners on pension guarantee credit will get £140 off through the Warm Home Discount.

Vulnerable families can also apply for extra help via their local council and their Household Support Fund.

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What about businesses?

The government’s energy bill relief scheme for England, Scotland and Wales will mean help with firms’ energy bills for six months from 1 October. A parallel scheme is operating in Northern Ireland.

Wholesale prices businesses pay for electricity will be capped at 21.1p per kWh for electricity and 7.5p per kWh for gas.

This will be applied automatically to companies using variable tariffs.

For those on fixed price contracts, the same discounts will be applied if the agreement started after 1 April 2022.

The savings will appear on bills in November and will be backdated to October.

A review will be published at the end of the year which will help identify “vulnerable” businesses that need support beyond March 2023.

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Boy, 14, dies and another boy, 13, in critical condition after entering River Tyne

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Boy, 14, dies and another boy, 13, in critical condition after entering River Tyne

A 14-year-old boy has died and a 13-year-old boy is in a critical condition after getting into difficulty in the River Tyne.

Emergency teams launched a large rescue operation yesterday afternoon after receiving reports two boys had got into trouble in the water near Ovingham, Northumberland.

One of the boys, aged 13, was rescued from the river and taken to hospital, where he remains “in a critical condition”, Northumbria Police said in a statement on Sunday morning.

Ovingham Bridge on the River Tyne which connects Ovingham with Prudhoe. Pic: Google Streetview
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Ovingham Bridge on the River Tyne connects Ovingham with Prudhoe. Pic: Google Street View

Police cordon set up near Prudhoe, across the River Tyne from Ovingham
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Police cordon set up near Prudhoe, across the River Tyne from Ovingham

A huge search, which involved the police, ambulance, fire and mountain rescue services, then continued as crews raced to find the second boy.

“Sadly, the 14-year-old’s body was later found in the water and he was pronounced dead at the scene,” police said.

Police cordon set up near Prudhoe, across the river from Ovingham
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A police cordon was set up across a footpath near Prudhoe, across the River Tyne from Ovingham

Chief Superintendent Helena Barron, of Northumbria Police, said it was an “absolutely tragic incident”.

She added: “Our thoughts are with the families of both boys at this difficult time as we continue to support them.

“A number of agencies were involved in the incident and their support was hugely appreciated.

“It is with great sadness that we could not provide a more positive update.”

Police said the parents of both boys are being supported by specially-trained officers.

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Sir Jim Ratcliffe scolds Tories over handling of economy and immigration after Brexit

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Sir Jim Ratcliffe scolds Tories over handling of economy and immigration after Brexit

Billionaire Sir Jim Ratcliffe has told Sky News that Britain is ready for a change of government after scolding the Conservatives over their handling of the economy and immigration after Brexit.

While insisting his petrochemicals conglomerate INEOS is apolitical, Sir Jim backed Brexit and spent last weekend with Labour leader Sir Keir Starmer at Manchester United – the football club he now runs as minority owner.

“I’m sure Keir will do a very good job at running the country – I have no questions about that,” Sir Jim said in an exclusive interview.

“There’s no question that the Conservatives have had a good run,” he added. “I think most of the country probably feels it’s time for a change. And I sort of get that, really.”

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Man Utd ‘is a very big challenge’

Sir Jim was a prominent backer of leaving the European Union in the 2016 referendum but now has issues with how Brexit was delivered by Tory prime ministers.

“Brexit sort of unfortunately didn’t turn out as people anticipated because… Brexit was largely about immigration,” Sir Jim said.

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“That was the biggest component of that vote. People were getting fed up with the influx of the city of Southampton coming in every year. I think last year it was two times Southampton.

“I mean, no small island like the UK could cope with vast numbers of people coming into the UK.

“I mean, it just overburdens the National Health Service, the traffic service, the police, everybody.

“The country was designed for 55 or 60 million people and we’ve got 70 million people and all the services break down as a consequence.

“That’s what Brexit was all about and nobody’s implemented that. They just keep talking about it. But nothing’s been done, which is why I think we’ll finish up with the change of government.”

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UK needs to get ‘sharper on the business front’

Prime Minister Rishi Sunak has indicated an election is due this year but Monaco-based Sir Jim is unimpressed by the Conservatives’ handling of the economy.

“The UK does need to get a bit sharper on the business front,” he said. “I think the biggest objective for the government is to create growth in the economy.

“There’s two parts of the economy, there’s the services side of the economy and there’s the manufacturing side. And the manufacturing, unfortunately, has been sliding away now for the last 25 years.

“We were very similar in scale to Germany probably 25 years ago.

“But today we’re just a fraction of where Germany is and I think that isn’t healthy for the British economy… particularly when you think the north of England is very manufacturing based, and that talks to things like energy competitiveness, it talks to things like, why do you put an immensely high tax on the North Sea?

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Rob Powell Political reporter

Rob Powell

Political correspondent

@robpowellnews

Sir Jim Ratcliffe’s comments carry weight because of who he is.

A billionaire business boss and Brexit backer who employs thousands of people should be naturally allied to the Tories.

Instead he seems to be calling time on them. Symbolically, that matters.

But what’s more important is that this mirrors what appears to be going on in business more broadly.

Labour has made a concerted effort to woo the private sector, with senior figures embarking on a “smoked salmon offensive” of breakfast meetings with top executives. And it’s working.

Commerce events held by Labour now pack out as firms pick up on the electoral direction of travel. Tensions still exist though.

Labour plans for a strengthening of workers’ rights and union power unnerve some.

Then there’s the persistent worry about the wider instincts of the party towards the commercial sector.

Or to put it another way, there are plenty of people in Labour that think someone like Sir Jim – a billionaire petro-chemical boss based in tax-free Monaco – is not part of the solution, but part of the problem.

“That just disincentivises people from finding hydrocarbons in the North Sea, in energy.

“And what we need is competitive energy. So I mean, in America, in the energy world, in the oil and gas world, they just apply a corporation tax to the oil and gas companies, which is about 30%. And in the UK we’ve got this tax of 75% because we want to kill off the oil and gas companies.

“But if we don’t have competitive energy, we’re not going to have a healthy manufacturing industry. And that just makes no sense to me at all. No.”

‘We’re apolitical’

Asked about INEOS donating to Labour, Sir Jim replied: “We’re apolitical, INEOS.

“We just want a successful manufacturing sector in the UK and we’ve talked to the government about that. It’s pretty clear about our views.”

Sir Jim was keener to talk about the economy and politics than his role at struggling Manchester United, which he bought a 27.7% stake in from the American Glazer family in February – giving him an even higher business profile.

Old Trafford stadium in Manchester. Pic: AP
Image:
Old Trafford stadium in Manchester. Pic: AP

Push for stadium of the North

He is continuing to push for public funds to regenerate Old Trafford and the surrounding areas despite no apparent political support being forthcoming. Sir Keir was hosted at the stadium for a Premier League match last weekend just as heavy rain exposed the fragility of the ageing venue.

“There’s a very good case, in my view, for having a stadium of the North, which would serve the northern part of the country in that arena of football,” Sir Jim said. “If you look at the number of Champions League the North West has won, it’s 10. London has won two.

“And yet everybody from the North has to get down to London to watch a big football match. And there should be one [a large stadium] in the North, in my view.

“But it’s also important for the southern side of Manchester, you know, to regenerate.

“It’s the sort of second capital of the country where the Industrial Revolution began.

“But if you have a regeneration project, you need a nucleus or a regeneration project and having that world-class stadium there, I think would provide the impetus to regenerate that region.”

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Strictly Come Dancing star Giovanni Pernice denies claims of ‘abusive or threatening behaviour’ on show

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Strictly Come Dancing star Giovanni Pernice denies claims of 'abusive or threatening behaviour' on show

Strictly Come Dancing star Giovanni Pernice has rejected allegations that he displayed “abusive or threatening behaviour” while working as a professional dancer on the show.

The 33-year-old Italian dancer said he was “surprised” amid reports the BBC is looking into complaints about his conduct.

A legal firm acting on behalf of the complainants said the broadcaster is “evidence gathering” – but the BBC has not confirmed that any probe has been launched.

In the statement shared on Instagram, Pernice wrote: “To my dear fans, you will be as surprised as I am that allegations have been made about my dance teaching methods in the media this week.

“Of course, I reject any suggestion of abusive or threatening behaviour, and I look forward to clearing my name.”

He added: “Those who have followed my journey on Strictly Come Dancing over the last decade will know that I am passionate and competitive.

“No one is more ambitious for my dance partners than me.

“I have always striven to help them be the very best dancers they can be.

“This has always come from a place of love and wanting to win – for me and my dance partners.”

Pernice signed off the message by writing: “Thank you all once again for your continued love and support! Giovanni.”

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A statement from law firm Carter-Ruck to the PA news agency said: “There have been numerous serious complaints made to the BBC who are now in the process of evidence gathering.

“As it is still an ongoing matter no further comment can be made at this stage.”

The Sun, which first reported suggestions that an investigation was underway, also claimed Pernice had quit the show.

Neither the BBC nor Pernice has confirmed his departure.

Sicily-born Pernice has been on the BBC One celebrity dancing show since 2015.

In 2021, he lifted the Strictly glitterball trophy for the first time alongside EastEnders star Rose Ayling-Ellis, who was the first deaf contestant to win. He had appeared in three show finals previously.

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He also holds the Guinness World Record for most jive kick and flicks in 30 seconds, which he achieved on the BBC’s Strictly It Takes Two show in 2016.

The BBC was approached by Sky News but declined to comment.

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