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Opinion: Keir Starmer pledged more cash in our pockets this year but are we facing a second cost of living crisis instead?

‘Make no mistake, energy bills being more than £1,700 a year is not normal’ the head of the UK’s leading fuel poverty charity has publicly declared.

Amid news that the ‘average’ bill will rocket to more than £1,800 a year from April, Matt Copeland from National Energy Action has demanded government intervention after the third consecutive rise in the quarterly cap.

Are we facing another cost of living crisis this year? Image: iStock.
Are we facing another cost of living crisis this year? Image: iStock.

April’s leap is much higher than that predicted by energy experts - highlighting just how volatile our market remains.

Rising wholesale prices, an eye watering £4bn of unresolved energy debt from the pandemic that is yet to be addressed and our bills are continuing to pay to service and some increases in standing charges are also all partly to blame.

The higher-than-expected jump means typical April bills will be £159 a year more than they were in April 2024 - equating to a lot of additional pressure on household finances.

It’ll also hit people's pockets at the exact same time as permitted water and council tax increases too.

Higher food prices have contributed to a rise in inflation. Image: iStock.
Higher food prices have contributed to a rise in inflation. Image: iStock.

All while businesses are bracing themselves for the impending rise in national insurance contributions coming at the start of the new financial year, adding to the weight of pressure on employers and on top of rising inflation driven by higher food prices, school fees and flights.

There’s other incoming increases too - such as the additional tax burden owners of electric vehicles will have to swallow after April which will add hundreds of pounds to the cost of running an EV.

While we’re some way from the £2,500-a-year energy bill peak seen shortly after Russia invaded Ukraine, that will prove to be little consolation for those now wondering how they’ll keep the lights on at home or at work.

It also means energy bills will soon have risen by more than £200 since Labour took power - that’s a far cry from their election pledge to reduce bills by £300 by 2030.

Labour’s decision to scrap winter fuel payments for pensioners appears increasingly harsh as bills rise again. Image: iStock.
Labour’s decision to scrap winter fuel payments for pensioners appears increasingly harsh as bills rise again. Image: iStock.

This upward trajectory also increases the pressure on a government who bravely scrapped winter fuel payments for 10 million older people last year - a move which critics continue to argue will plunge tens of thousands into poverty.

Only a few days ago - even before the latest rises were announced - the Scottish Labour conference backed a motion calling on the government in Westminster to reverse those cuts, that will now appear increasingly harsh in the light of escalating energy prices once again.

Keir Starmer promised at the start of the year that his government would put more cash in people’s pockets. Photo: KMG/Parliament
Keir Starmer promised at the start of the year that his government would put more cash in people’s pockets. Photo: KMG/Parliament

Keir Starmer’s New Year pledge that his government would be the one to put ‘more cash in your pocket’ this year also appears to have been a somewhat risky declaration.

Because is it not now the case that Labour risks fuelling a second cost of living crisis instead?

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