LONDON (CU)_Households in Britain are currently struggling with the ongoing cost of living crisis, with rising energy bills, which have also triggered a food price hike, now forcing many people to choose between eating and heating. Against this backdrop, the chief executives of some of the biggest energy suppliers in the country are calling on the government launch “unprecedented” measures to prevent a fuel poverty crisis next winter.
The energy price cap announced by energy regulator Ofgem, in February 2022, came into effect this month. Accordingly, the cost of the cap has now been increased from the previous £1,277 to £1,971 a year, for a household with average energy consumption on a ‘dual fuel’ gas and electricity standard variable rate tariff (SVT).
Meanwhile, pre-payment customers, who tend to be among the most vulnerable, are facing an even larger increase in their energy bills. The cap system has been blamed for the failure of dozens of competitors, since they are unable to pass on huge rises in raw energy costs, which is the energy bosses are calling for it to be scrapped and for the government to expand its support measures to prevent ‘horrific’ winter ahead.
Speaking to the Business, Energy and Industrial Strategy (BEIS) committee, Scottish Power chief executive Keith Anderson called for the cap system to be replaced by a social tariff that would see the better off pay more. He also recommended the establishment of a deficit fund that would allow struggling households to be given 10 years to pay off £1,000 on their bills. “I think the problem’s got to a size and scale where it requires something significant of that nature where, for those people who are deemed to be in poverty…, that puts their bill back to where it used to be before the gas crisis,” he explained.
Commenting on the matter, Anderson’s counterpart at E.ON, Mike Lewis, pointed to fears that up to 40 per cent of British households may face a fuel poverty from October, at a time when energy prices usually increase and when the price cap is due to adjusted once again. He supported the social tariff idea but called on the government to do more than the Council Tax rebate and energy loan already announced, as he recommended the removal of VAT and green levies from energy bills in the short term.
