Energy suppliers and charities are pressing the UK government to act urgently on rising household energy bills, warning that inaction risks a second energy crisis comparable to the 2022 spike triggered by Russia's invasion of Ukraine.
Energy UK, the suppliers' trade body, said domestic gas prices rose on Thursday, with forecasters predicting a 16% increase in energy bills in January for 20 million households on variable tariffs. The typical annual bill could climb to £1,999 from the current £1,723, according to consultancy Cornwall Insight. This follows a 4% rise in October that added about £60 per year to bills.
Dhara Vyas, chief executive of Energy UK, said the government must intervene before another crisis hits. "Last-minute emergency interventions run the risk of being badly targeted and costing us all more," she said. EDF Energy boss Simone Rossi warned that the UK was "walking into a second energy crisis."
Energy UK attributed rising bills partly to high wholesale prices driven by international conflict in the Middle East and disruption to shipping through the Strait of Hormuz. The trade body acknowledged government support measures already taken. VAT on electricity bills was cut on Thursday, and some levies were cancelled or shifted to taxation earlier this year. But these savings have been wiped out by wholesale price increases.
A growing problem is customer debt. Energy UK said the cost of unpaid bills now adds an average of £67 per year to everyone's bills. Adam Scorer, chief executive of charity National Energy, told BBC Breakfast the issue was deepening for those already struggling. "That's more poor people getting into more serious levels of debt," he said.
Energy UK called for targeted government measures including support beyond the £150 Warm Home Discount for benefits recipients, a discounted social tariff, debt relief schemes for severely affected households, and removal of more levies from electricity bills to shift costs to taxation.
Prime Minister Andy Burnham said the government was "looking at any measure that can give people breathing space, that can take the pressure off." He did not dispute EDF Energy's crisis warning, calling the cost of home energy "very difficult indeed."