Spending

Energy boss says poor people will soon be spending 40% of their income on electricity

An energy company boss said some of the poorest people could soon be spending 40% of their income on electricity. The chilling warning came from the boss of one of the country’s biggest suppliers, E.ON.

Michael Lewis, chief executive of E.ON UK, called on the government to “tax those with the broadest shoulders”, when asked if a windfall tax should be introduced to tackle the energy crisis. He told BBC One’s Sunday Morning TV show: ‘Well for us the most important thing is that the government steps in, it’s up to the government to decide how they fund this.

“All I would say is it’s important that when they tax to meet this challenge, they tax those with the broadest shoulders.” Mr Lewis spoke of the growing number of customers falling into energy poverty, which will only get worse later in the year.

He said: “We’re seeing a significant number of people in fuel poverty, which is more than 10% of their disposable income being spent on energy, and that goes up to around 20%, and in October our model suggests it could rise to 40% if the government does not somehow step in. Around one million of the eight million accounts with E.ON in the UK are already in some sort of arrears , which Lewis said are expected to rise 50% in October.

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He also said an increase in Universal Credit would “absolutely” help “people at the lower end of the income bracket who are most affected by this.”

Education Secretary Nadhim Zahawi, when asked about a windfall tax on Sunday, said: ‘We will look at all options. Together with the Chancellor, the Prime Minister and the Cabinet, I will examine all options. »

Mr. Zahawi spoke of the importance of investments by oil and gas producers, adding: “If you apply a windfall tax, they will probably have to reduce or eliminate their dividend. Who receives the dividend? Retirees through their pension funds.

“The investment has to be real, which I think Rishi (Sunak) will demand from all these companies and to see a roadmap towards that investment. We are not taking any options off the table.

Mr Zahawi added to Sophy Ridge on Sky News on Sunday: ‘We want to see their investment, but also remember that it’s pensioners who basically get the dividend from these companies, and if they’re going to cut their dividend because they had an exceptional tax, so it will make a difference for retirees.

After pointing to inflation elsewhere in the world, Mr Zahawi said of the Chancellor: “When he finds the best way to target aid to the people who really need it, he will make an announcement, I I’m sure of it”.