Energy UK, the suppliers’ trade body, has called on the government to implement urgent measures to help households manage escalating energy costs ahead of winter. Gas prices increased on Thursday, and industry forecasters are predicting a substantial 16% rise in domestic energy bills starting in January for approximately 20 million households on variable tariffs regulated by Ofgem’s price cap.
Households across England, Scotland, and Wales experienced a 4% price increase at the beginning of October, translating to approximately £60 annually or £5 monthly for typical households using both electricity and gas. Projections indicate the situation will worsen considerably in January, with consultancy Cornwall Insight forecasting that typical annual bills could reach £1,999, up from the current level of £1,723.
Energy UK acknowledged that the government has provided some assistance, including a VAT cut on electricity bills announced on Thursday and the cancellation or reallocation of certain levies earlier in the year. However, the trade body stated these savings have been offset by elevated wholesale prices paid by suppliers, which have been influenced by international developments including Middle Eastern conflicts and disruptions to shipping through the Strait of Hormuz. The situation mirrors the 2022 energy crisis triggered by Russia’s invasion of Ukraine.
The suppliers’ organization is advocating for several specific interventions, including enhanced targeted support beyond the existing £150 Warm Home Discount for benefit recipients, a debt relief program for severely affected households, and the removal of additional levies from electricity bills in favor of taxation-based funding. Energy UK emphasized that customer debt has reached concerning levels, adding an average of £67 annually to all bills.
Prime Minister Andy Burnham stated the government is considering measures to provide relief to households struggling with energy costs. Energy UK’s chief executive warned against delaying action, noting that last-minute emergency interventions risk being poorly targeted and more expensive overall.
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