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British households may need to pay $1,057 more for energy subsidies

  • By Al Mayadeen English
  • Source: The Guardian
  • 28 Aug 2022 16:08
3 Min Read

It is estimated that the subsidies will jump to $106 billion next season.

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  • British households may need to pay $1,057 more for energy subsidies
    A cold winter in Britain (Bloomberg)

Britain may have to spend $27 billion more in subsidies if they are going to cover the surging energy bills in the upcoming heating season, according to a report by The Guardian on Wednesday, citing a research paper published by the Institute for Government (IfG). 

Read next: 10% of Britons no longer holiday due to soaring gas prices: Survey

This statement would entail every British household paying £900 ($1,057.45) more this winter compared to May's estimate. 

At this rate, according to the IfG, it is estimated that the subsidies will be jumping to £90 billion ($106 billion) next season. 

“Energy prices have risen sharply again in recent weeks and are now expected to stay higher for longer than previously expected. Deciding whether and how to help households and businesses with these costs will be one of the most urgent tasks facing the new government,” Olly Bartrum, an analyst involved in the report, said.

Bartrum noted that the current situation would entail "substantial extra spending" as “even limiting help to the most vulnerable could cost several billion pounds.”

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“The government should also do more to encourage greater energy efficiency and reform energy markets to reduce vulnerability to high energy prices if it wants to avoid further expensive support packages in a future likely to be defined by highly volatile energy prices,” Bartrum concluded.

About over a week ago, an NHS chief warned that soaring energy costs will kill more than 10,000 people this winter; a situation the NHS Confederation referred to as a "humanitarian crisis".

"Health leaders are clear that, unless urgent action is taken by the Government, this will cause a public health emergency," said Matthew Taylor, Chief Executive of the NHS Confederation. 

Last week, the Daily Express reported that the United Kingdom plans to introduce a system of benefits for people willing to cut down on electricity during the coming fall and winter seasons.

The National Grid energy firm wants consumers to turn off electric appliances, including washing machines and video game consoles, between 5 pm and 8 pm on a daily basis, suggesting paying individuals up to £6 ($7 dollars) per kWh if they reduce their electricity use during the busiest three-hour period.

European energy costs have been rapidly rising in line with a global trend, since 2021. The energy situation deteriorated significantly after the start of the war in Ukraine, as well as the adoption of various sanctions packages against Moscow, causing EU countries to look for alternatives to Russian energy supplies.

Read next: Gas futures in Europe top $3,500 per thousand cubic meters

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