Energy suppliers and their trade body are pressing the UK government for immediate intervention to prevent a deeper energy crisis this winter, citing forecasts of a 16% price increase in January for 20 million households on variable tariffs.
Energy UK, the suppliers' trade body, warned that inaction would create a longer-term, more costly crisis. The regulator Ofgem's price cap will allow domestic energy bills to rise to an average of £1,999 annually in January, up from £1,723 currently, according to consultancy Cornwall Insight. Households have already absorbed a 4% increase since October, equivalent to about £60 per year.
Energy UK chief executive Dhara Vyas said the government must act before bills jump again. "Last-minute emergency interventions run the risk of being badly targeted and costing us all more," she said. The trade body acknowledged the government has already provided some support, including a VAT cut on electricity bills announced Thursday and cancelled levies. But Vyas said these savings have been wiped out by high wholesale prices driven partly by international events, including conflict in the Middle East and disruption to shipping through the Strait of Hormuz.
EDF Energy boss Simone Rossi warned Thursday that the UK was "walking into a second energy crisis." Vyas said customer debt levels now add an average of £67 annually to all bills, creating urgency for intervention. National Energy charity chief Adam Scorer told BBC Breakfast that the issue is "not more people getting into debt, that's more poor people getting into more serious levels of debt."
Energy UK is calling for targeted support beyond the £150 Warm Home Discount for benefit recipients, including a discounted social tariff. The trade body also wants a debt relief scheme for severely affected households and removal of more levies from electricity bills, shifting costs to taxation as part of wider electrification efforts.
Prime Minister Andy Burnham told the BBC he was examining "any measure that can give people breathing space, that can take the pressure off." He did not characterize Rossi's crisis warning as an overstatement.