Ofgem, Great Britain’s independent energy regulator, has just announced a controversial increase in the energy price cap – the maximum standard price – for the next three months. This change will apply from next January through March. The new maximum price ceiling will raise by 0.2%. The average annual dual fuel energy bill will now be £1,758, in replacement of today’s current cap of £1,755. This increase arrives while millions of households are already burdened by excessively high energy costs.
The increase in the price cap serves as a painful reminder that energy affordability is still a big concern. National Energy Action, a charity focused on fuel poverty, has expressed alarm over the financial burden faced by many households. National Energy Action chief executive Adam Scorer disclosed that people approaching the charity for assistance had an average energy debt of almost £1,700. This incomprehensible number appeared by the end of October. This figure is up by £700 from three years ago.
The energy debt crisis is building at an alarming pace. In a mere three years, the overall energy arrears in the UK has jumped from £2 billion to a shocking £4.4 billion this year. Scorer emphasized the dire situation faced by many households:
“Energy bills remain impossibly high for millions across the UK, just as they have been for the last four years. People are rationing their heating, they are cutting back on cooking, they are deep in debt, and they are suffering in cold, damp homes.” – Adam Scorer
With the new price cap just around the corner, attention is already shifting to future government interventions. We’re calling on the new Chancellor, Rachel Reeves, to make that announcement in the budget statement on Fuel Poverty Awareness Day. National Energy Action has further called upon Reeves to tackle the urgent stockpile of household energy debt within this budget.
National Energy Action called for an immediate solution to relieve the financial squeeze on households. They proposed that the government drop green environmental levies from energy bills and recoup those costs through general taxation. This targeted strategy would bring immediate and meaningful relief to hardworking families who are already struggling under the burden of skyrocketing energy costs.
“With little prospect of bills falling significantly any time soon, the government will need to act. This year the budget falls on Fuel Poverty Awareness Day. I hope the government is sufficiently aware to deliver the urgent and long-term action needed to deliver affordably warm homes.” – Adam Scorer
To alleviate some of the financial pressures on households, National Energy Action proposed that the government consider removing the cost of environmental levies from energy bills and recouping those costs through general taxation. This strategy could provide much-needed relief to families grappling with rising energy expenses.