Suppliers pile pressure on government over energy bills
Immediate action is needed to help households struggling with bills this winter, says trade body Energy UK.
Energy UK, the suppliers' trade body, has urged the government to take immediate action to alleviate the strain on households struggling with skyrocketing energy bills this winter. Domestic gas prices surged on Thursday, and experts predict steep increases in January, leading to a prolonged, more expensive, and severe energy crisis if no action is taken.
The BBC reported that 20 million households with variable energy tariffs affected by Ofgem's price cap are set to experience a 16% rise in domestic energy prices next year.
Prime Minister Andy Burnham acknowledged the government's consideration of various measures to alleviate the pressure on households. The cost of electricity bills for the typical household using both gas and electricity on a direct debit basis has already risen to £1,723 annually, with a potential increase to £1,999 in January, according to Cornwall Insight.
Energy UK confirmed that while the government has already provided some relief, such as a VAT cut on electricity bills and cancellation or shift of some levies earlier in the year, the high wholesale prices paid by suppliers due to international events, including the Middle East conflict, have negated these savings.
The trade body emphasized the need for urgent intervention, drawing parallels to the 2022 crisis triggered by Russia's invasion of Ukraine. Energy UK's CEO, Dhara Vyas, highlighted the growing levels of customer debt, which now add an average of £67 annually to everyone's bills. She stressed that last-minute emergency measures risk being poorly targeted and costly, urging the government to act before bills rise again.
Energy UK is advocating for government measures, including targeted support beyond the £150 Warm Home Discount for those on benefits, a debt relief scheme for severely affected households, removing levies from electricity bills and shifting them to taxation, and promoting electrification. National Energy CEO Adam Scorer agreed with Energy UK's analysis, stating that the rising debt burden is disproportionately impacting poor households and needs immediate attention to avoid further financial distress.
Prime Minister Burnham acknowledged the severity of the energy cost crisis, noting that it, along with petrol and diesel prices, is causing significant difficulties for many households.
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