The cost of living was a crisis a long time in the making. Households and businesses were already drained by Covid and Omicron, and then energy prices arrived on top.
Wholesale gas rose by about 500% in under a year. That hit households, small firms like mine, and large companies. In the same period, 26 energy firms stopped trading.
I co-own three restaurants in central London. Before the last round of price rises we paid between £2,500 and £3,000 a month for energy at each site. The bill I wrote about was about £5,600. Turnover at the same time was a fraction of what it had been before lockdown: a day that once meant about 600 customers was closer to 60. I said the same to The Guardian.
Households were in the same bind. Gas and electric were taking more of people’s income, and the £20-a-week cut to Universal Credit made it worse. The Resolution Foundation warned that a typical annual energy bill could jump by around £600, and called it a cost-of-living catastrophe.
For small businesses there was no equivalent of the household cap. One estimate had commercial energy bills nearly doubling, on top of higher food and drink costs in hospitality.
Labour’s front bench argued for cutting the 5% VAT on energy bills straight away. Angela Rayner and Rachel Reeves set out a plan that included a one-off windfall tax on North Sea oil and gas producers, scrapping VAT on household energy bills for 12 months, and more money for the Warm Home Discount.