The Trades Union Congress (TUC) has urged the UK government to implement emergency support for households ahead of a significant energy price increase. The trade union body is calling for a social tariff that would shield two-thirds of households from the impending rise in energy costs, which is expected to take effect on July 1.
Energy Price Hike Details
Ofgem's price cap is set to increase by 13% from July 1, pushing the typical annual energy bill up by £221 to £1,862. This surge is attributed to rising wholesale energy prices following the Middle East conflict involving the US, Israel, and Iran. Critics have labeled the impact on UK households as "Trumpflation," referencing US President Donald Trump's policies.
TUC's Proposed Social Tariff
The TUC proposes a permanent social tariff for low- and middle-income households. Under the plan:
- Lowest-income households (below the relative poverty line) would receive an immediate 30% discount, saving up to £559 per year.
- Middle-income households (between the poverty line and average income) would get a 20% reduction, saving £373 annually.
- Middle and some higher-income households would benefit from a 10% cut, saving up to £186 per year.
This approach would protect two-thirds of all UK households from the full impact of the price hike.
Funding the Tariff
The TUC acknowledges that the scheme could cost between £3.4 billion and £5.9 billion annually. It proposes funding this by increasing the bank surcharge tax, which could raise up to £50 billion over the next four years.
Reaction from TUC General Secretary
Paul Nowak, TUC General Secretary, stated: "Working people must not bear the brunt of Trump's illegal war. The government has rightly stepped up support for energy intensive industries – it's now time to act on household bills too. The price cap has kept down bills for now, but the changing price cap means that from the summer, households will start to feel the pain of rising bills."
He added: "This common-sense approach would stop punishing price rises for households and bring down inflation. It should be paid for by an increase in the windfall tax on banks, who have made eyewatering profits. Beyond times of crisis, we need to protect households from the rollercoaster of energy prices in a volatile global market by introducing a permanent social tariff which cuts bills for those low-income households – as well as wider moves to delink British energy prices from international wholesale gas prices."
