London (CNN Business)The United Kingdom will have to find an answer to soaring energy bills soon or risk a humanitarian crisis. But freezing gas and electricity prices over the next two winters could cost the government over £100 billion ($118 billion), more than it spent paying millions of people’s salaries during the pandemic.
Earlier this year, the UK government tried to protect households against 90% of the expected increases in energy bills through tax cuts, energy bill rebates and direct payments. But natural gas and power prices have shot up since then, as have forecasts of future increases.
Researchers at the Institute for Government said Tuesday that the government would need to spend an extra £23 billion ($27 billion) to protect households against about 90% of the expected rises in energy bills until April 2023. Offsetting the same proportion for the year to April 2024 would cost another £90 billion.
That forecast chimes with the cost of a proposal by Scottish Power, one of the UK’s biggest energy companies. It has called on the UK government to protect millions of households by freezing their bills for two years, according to report by the Financial Times.
Nearly one in four adults plan never to turn their heating on this winter, polling suggests, as average bills are set to rocket while the temperature drops.
This figure is even higher for parents with children under 18, according to a Savanta ComRes survey carried out before the new price cap was announced.
The pollsters asked more than 2,000 UK adults how they would respond to increasing energy prices over the winter – 23% said they would not turn their heating on at all, rising to 27% among parents with under-18s.
Seven in 10 (69%) said they would switch their heating on less, and one in 10 (11%) said they would take out a loan, with the latter figure rising again for those with children under 18 (17%).
It comes amid resounding warnings that people are in for a dire winter, with the energy price cap set to rise by 80% by October, pushing the average household’s yearly bill up from £1,971 to £3,549.
Chancellor Nadhim Zahawi has said he is working “flat out” to draw up options for a plan of action for the next prime minister so they can “hit the ground running” when they take office in September.
How it started.
How it is going. pic.twitter.com/ZEz17M7Ba3
— Peter ⚒ Spina | Gold & Silver Maximalist (@goldseek) August 29, 2022
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— Luke Gromen (@LukeGromen) August 28, 2022