Trade body Energy UK has urged the government to implement immediate support measures to assist households facing mounting energy costs this winter. The organization warned that failing to intervene could result in a deeper, more expensive, and prolonged crisis for consumers across England, Scotland, and Wales.
The call for action follows a 4% increase in the Ofgem price cap that took effect at the beginning of October. For a typical household paying by direct debit, this change adds approximately £5 per month, or £60 annually, bringing the yearly total to £1,723. However, analysts at Cornwall Insight have projected that typical annual bills could rise significantly further, reaching £1,999 in January. That is the equivalent of about £60 per year – or £5 per month – taking an annual bill to £1,723 for the typical household using both electricity and gas and paying by direct debit if this level was sustained for a ye.
Energy UK CEO Dhara Vyas emphasized that the situation necessitates urgent intervention, particularly as customer debt levels continue to climb. This debt burden currently adds an average of £67 annually to the bills of every consumer. Vyas noted that the country must learn from the 2022 energy crisis, which was fueled by the impact of Russia’s invasion of Ukraine. She stated, “We cannot afford to wait for the same scale of crisis before acting again. We must heed the lessons from that time.”
While Energy UK acknowledged previous government efforts—such as the reduction of VAT on electricity bills and the shifting of certain levies into general taxation—they argue these measures have been neutralized by elevated wholesale prices. These costs are being driven by international factors, specifically ongoing conflicts in the Middle East and shipping disruptions through the Strait of Hormuz.
Industry forecasts suggest that nearly 20 million households on variable tariffs could see a 16% rise in domestic energy prices early next year. In response to the growing pressure, Prime Minister Andy Burnham stated that the government is evaluating any potential measures that could alleviate the financial burden on households. Figures revealed by earlier this week showed forecasters predicting a 16% rise in domestic energy prices in the new year for 20 million households on variable tariffs affected by regulator Ofgem’s price cap.
