Ros Atkins on why energy bills are rising
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Last week Ofgem – the Government regulator for electricity and gas – announced a new energy price cap of £2,000 per year, prompting many households across the British Isles to consider their energy consumption for the coming months. The issue is potentially further exacerbated by Parliament’s expenses system which allows MPs to claim payments for electricity, gas and dual fuel bills. So, how is this even possible?
Can MPs claim for their energy bills?
MPs who represent constituencies outside London are allowed to claim expenses on top of their £81,932 salary, to pay rent and bills for their second homes.
Across the 2020-21 financial year, some 316 MPs claimed a total of £182,983 for gas, electricity and dual fuel.
In fact, between January and May of last year, 192 MPs submitted claims for £28,279 worth of energy bills.
This included at least nine MPs who earned extra cash as Government ministers at the time.
Despite being paid £67,505 in addition to their MPs salary to serve in Prime Minister Boris Johnson’s Cabinet, three Secretaries of State put in claims.
The Environment Secretary George Eustice and Defence Secretary Ben Wallace – both incumbents – and the then-education secretary Gavin Williamson made up the trio.
Mr Wallace claimed £513 for an electricity bill in March 2021.
Carla Lockhart, an MP for the Democratic Unionist Party (DUP), made the largest individual claim during the early months of 2021, worth more than £1,000.
However, records held by the Independent Parliamentary Standards Authority (IPSA) don’t reveal whether individual claims are for monthly, quarterly or annual bills.
Across the full financial year (2020-21), the highest claimant was Tory MP Danny Kruger.
Mr Kruger, who is the son of Great British Bake Off host Prue Leith, claimed £3,598 across six separate claims.
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Last week, it was announced that energy bills for a typical UK household will rise from £1,277 to £1,971 on a yearly basis, or £107 per month to £164.
Overall this represents an increase of more than 50 percent – five times greater than the previous record growth of £139, which came into effect in October 2021.
The energy price cap is the maximum price that suppliers in England, Wales and Scotland can charge domestic customers on a standard – or default – tariff.
As a result of the price cap rising it’s now feared by industry experts that a significant number of people – potentially more than one in four, according to the End Fuel Poverty Coalition – will be in fuel poverty once the increase comes into effect.
Why have energy bills been rising?
Gas and energy prices have been rising globally for several reasons. These include:
- A cold winter in Europe in 2020/21, which has put pressure on supplies and, as a result, meant stored gas supplies dropped
- A relatively windless summer meant it was difficult to replenish those supplies
- Increased demand from Asia – especially China – for liquefied natural gas
Consequently, energy levels reached a record high of 450p per therm last December.
As one of Europe’s biggest users of natural gas, the UK has been significantly affected.
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