Energy suppliers urge UK government to act before winter bill rises

Energy UK has urged the UK government to provide immediate support to households struggling with energy bills, warning that further increases expected in January could create a deeper crisis. Domestic gas prices rose on Thursday, while forecasts cited by the BBC suggested a 16 per cent increase in domestic energy prices in January for about 20 million households on variable tariffs covered by Ofgem’s price cap. Households in England, Scotland and Wales already faced a 4 per cent rise at the start of October.

For a typical household paying by direct debit and using gas and electricity, the annual bill reached about £1,723 if that level continued for a year. Cornwall Insight forecast that the same typical annual bill could rise to £1,999 in January. Energy UK said the pressure reflected high wholesale prices, partly linked to conflict in the Middle East and disruption to shipping through the Strait of Hormuz.

The trade body acknowledged that the government had cut VAT on electricity bills and cancelled or moved some levies into taxation. It said those savings had been outweighed by wholesale costs and warned that customer debt was growing. Debt costs now add an average of £67 a year to every household bill, it said.

Energy UK is calling for support beyond the £150 Warm Home Discount, a debt-relief scheme for severely affected households, and the removal of further levies from electricity bills with costs shifted to taxation. Chief executive Dhara Vyas said the government should act before bills rose again rather than wait for an emergency. Prime Minister Andy Burnham said ministers were considering measures that could give households breathing space.