Energy suppliers and charities are urging the UK government to intervene immediately ahead of forecast energy bill increases in January that could push typical household bills to £1,999 a year, up from the current £1,723.
The trade body Energy UK said domestic gas prices rose on Thursday, and forecaster Cornwall Insight predicts a 16% jump in January for the 20 million households on variable tariffs regulated by Ofgem's price cap. The October price cap increase of 4% added about £60 per year to typical bills. Energy UK chief executive Dhara Vyas said the government must act before a deeper crisis emerges, warning that "last-minute emergency interventions run the risk of being badly targeted and costing us all more."
The suppliers blame high wholesale prices partly driven by international events, including conflict in the Middle East and disruption to shipping through the Strait of Hormuz. Energy UK acknowledged the government has already cut VAT on electricity and cancelled or shifted some levies into taxation. But it said these savings have been wiped out by wholesale cost pressures similar to those that followed Russia's invasion of Ukraine in 2022.
Energy supplier EDF's chief executive Simone Rossi warned the UK was "walking into a second energy crisis." Customer debt has grown sharply, adding an average of £67 per year to all bills, according to Energy UK. Adam Scorer, chief executive of charity National Energy, told the BBC that the problem involves "more poor people getting into more serious levels of debt," not simply more people entering debt.
Energy UK is calling for targeted support above the existing £150 Warm Home Discount for benefit recipients, eventually leading to a discounted social tariff. The body also wants a debt relief scheme for severely affected households and the removal of more levies from electricity bills in favour of taxation as part of a wider electrification strategy.
Prime Minister Andy Burnham said the government was considering measures to provide relief. He did not dispute EDF's characterisation of the situation as a crisis, calling energy costs alongside petrol and diesel prices "very difficult indeed."