With no energy deals left on the market, households continue to struggle with rising bills as the cost of gas and electricity continues to go up.
The boss of one of the UK’s biggest energy providers has warned the Government must urgently provide a fresh support package for the poorest households amid the cost of living crisis to avoid a winter emergency.
Keith Anderson, who leads ScottishPower, said energy bills are likely to go up by nearly another £1,000 for households next winter. “Given what’s going to happen in October, we think that urgent action is required to put in place a mechanism to support customers through this period. You require a sum of about £1,000 to start bringing bills back closer not to where they used to be - but closer to where it’s realistic to expect people to be able to pay them,” he said.
Ofgem, the energy regulator, will announce how much its energy price cap is due to go up in August, before the new limit takes effect from October for households. ScottishPower believes this might go to £2,900 on October 1, putting further pressure on families after last month’s record increase from £1,277 to £1,971.
Anderson called for 'targeted' support for the most vulnerable customers. This could be for customers with pre-payment meters, those on Universal Credit, or those eligible for the warm home discount. “This will take time to implement, and it will take time to agree on the exact format of it … that all needs to be debated, signed, sealed, delivered, designed and agreed by July to allow it to be implemented by October.”
He said the Government’s plan to give each household £200 towards their energy bill – a sum that will need to be paid back – will be insufficient. “Our view is clearly now this £200 is not going to be anywhere near enough,” he said.
He said there are several different ways for the £1,000 to be funded. It could for instance be added to all household energy bills over the next decade.
But many campaigners have already warned that the £200 rebate on energy bills from October and the £150 council tax rebate will not be enough.
A Government spokesman said: “We recognise the pressures people are facing with the cost of living, which is why we have set out a £22 billion package of support, including rebates and energy bill reductions. We also urge energy companies to support their customers as we manage the impact of high global gas prices.
“We are also supporting vulnerable households through initiatives such as the £500m Household Support Fund and the Warm Home Discount, with the Energy Price Cap continuing to insulate millions of families from high global gas prices.”
Additional report by PA
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