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Energy UK calls for government intervention on energy bills as problem ‘too big for any industry to meet’

With bills expected to jump over 60% in October, Energy UK has called for government intervention. Image: Getty.

With bills expected to jump over 60% in October, Energy UK has called for government intervention. Image: Getty.

Energy UK has called on the government to rollout more help for consumers with energy bills following predictions that the price cap will surge again.

Cornwall Insight unveiled its latest predictions for the upcoming winter period earlier this week, with the Default Tariff Cap now expected to hit £3,244 for Q4 2022 and £3,363 for Q1 2023.

“It’s extremely worrying news for customers that energy bills could be even higher than originally predicted this winter,” said Dhara Vyas, director of advocacy at Energy UK.

“The number of people contacting their energy company is higher than ever and suppliers know that many of their customers are already struggling with paying household bills and managing their finances during this cost-of-living crisis.”

As such, the trade association has argued further government intervention is needed, with suggested actions including removing VAT and moving existing levies into general taxation.

This follows a similar suggestion from the Climate Change Committee in its most recent progress report, while utilities last year branded gas and electricity levies “outdated” as they called for reform.

Government should also look to defer the cost of supplier collapses to provide relief to customers, suggested Energy UK.

UK Energy Incubator Hub became the fourth supplier to collapse in 2022 this month, bringing the total to have shuttered since September 2021 to nearly 30 along with Bulb entering Special Administration. The estimated cost of these failures is expected to add £4.6 billion - or £164 per household - to customers’ bills.

To help consumers struggling with surging energy bills a number of steps have been taken by both suppliers and government, including 11 of the largest energy suppliers signed up to Energy UK’s Vulnerability Commitment, pledging additional funding and work with debt advice charities.

The Energy Bill Support Scheme will see households receive a £400 grant in October to help manage energy costs and schemes such as the Warm Home Discount and Energy Company Obligation will provide over £1.5 billion the coming winter.

However, Vyas warned that “the scale of the help needed is too big for any industry to meet,” with further support from the government still needed.

“While the current support package is very welcome, if bills are going to be even worse than had been predicted, further Government intervention will be necessary. This could include looking at what else can be taken off energy bills, even on a temporary basis, to provide further and much-needed relief for customers. It’s essential that the next Prime Minster urgently implements long-term plans to improve energy efficiency in homes and increase sources of clean domestic energy to bring down bills permanently.”

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