Energy bill hike will hit poor families hardest and slow pandemic recovery, warns Shadow Business Secretary on Wearside visit

That was the warning from Wearside-born Shadow Business Secretary Jonathan Reynolds on a return visit to Sunderland.

The Stalybridge and Hyde MP and lifelong Sunderland AFC fan – who is originally from Houghton – took part in a round table with North East business representatives at the Stadium of Light today, Thursday, February 3.

And with domestic energy bills set to skyrocket, he said leaving people with less money in their pockets would have a serious impact on economic revival.

“The recovery from Covid is based on people going out and spending money now restrictions no longer apply, so there’s a lot at stake,” he said.

Chancellor Rishi Sunak today announced a £9billion package, including a one-off repayable £200 discount and a £150 rebate on council tax bills, and £144 million to councils to support vulnerable households amid surging energy prices.

But Mr Reynolds said the discount ‘sounds, to be honest like a pay day loan almost’ and added: “I can’t fathom why they think that is successful.

“They are also going to give people a council tax rebate as they are putting up their National Insurance – that does not seem sensible either.

“We know after the pandemic there is pressure on the Chancellor of the Exchequer but the crucial thing is if they are going to allow a rise of the kind it seems the Chancellor is contemplating, its incredibly bad for households and families but that in itself will put further pressure on inflation, because of the way we calculate inflation and, of course, there’s nothing for businesses.”

Firms such as manufacturing companies would be hit hard, he said: “This is millions of pounds a month for energy-intensive businesses. At the minute, I can’t see a commitment from the Government to a lot of sectors of the economy but certainly not to those.”

Rising bills would also affect low-income families in particular, who were likely to pay more per unit for energy than those on direct debit: “I’m hearing reports of possible double digit inflation on food,” said Mr Reynolds.

"On the official measure, inflation is the highest for 30 years but within that there are a whole range of other impacts."

Support your Echo and become a subscriber today.

Enjoy unlimited access to all of our news and sport, see fewer ads, experience faster load times, test your brain with daily puzzles and get access to exclusive newsletters.

Your support for our journalism means we can continue telling Sunderland’s stories for generations to come. Click here to subscribe - and click here to get a snapshot of the Echo’s news and sport to your inbox through our email newsletters.