The cost of living crisis, paired with the increasing price of energy bills, will hit Brits hard this winter.
As reported by The Express, the average annual bill for households is predicted to hit the £4,000 mark by the end of 2022. This charge is more than three times higher than what people had been paying just four weeks ago.
This figure will hurl many families into fuel poverty, with many having to prioritise certain payments over electricity and gas. And with this, two of the UK's largest energy suppliers have set out a plan to stop the rise.
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Centrica, who own British Gas, and Octopus Energy have reportedly sent a plan to the UK Government that aims to freeze household bills for at least 24 months.
The current plan, which is being discussed heavily in the industry, is planning to create a multibillion-pound facility that could spread the cost of an emergency funding package over ten years.
Under this new plan, commercial banks would deposit cash into a state-backed fund. This will then be used by suppliers to meet the difference of energy prices, instead of raising the price cap on individual bills.
The price cap is currently set at £1,971. Throughout this scheme, the money would then be paid back to the fund over the next decade to 15 years, through an additional levy.
Octopus Gas chief executive Greg Jackson spoke to The Guardian about this plan, and said that "urgent action" was needed. Greg said: "Because of the war in Ukraine, the UK is having to pay £51bn extra for its gas – the equivalent of 9p on the basic rate of income tax.
“Urgent action is needed to help people through this winter, whether it be a doubling of the existing government support scheme, freezing the price cap, or a private-sector initiative like the tariff deficit proposal.
“And we need concerted effort to reduce the problem by next winter through more efficiency, renewables, gas storage and market reform.”
A spokesperson for Centrica declined to comment on discussions with the Government but said: “It’s clear a significant intervention is needed to protect customers.
“There are many ideas being discussed but each needs to be assessed carefully to ensure it’s in the customer’s long-term interest and to avoid any unintended consequences.”
Greg Jackson also has repeatedly argued the risks of not tackling rising inflation. He spoke to Express.co.uk recently, saying: "We've got inflation running at close to 10 percent, and once you get into an inflationary spiral that is very hard to get us out of.
“So, spreading costs over a long period of time reduces the impacts on inflation, and that stops the spiral.
“With spirals the problem as we've seen, energy prices are flowing through everything in the economy, and that's the thing that if you're not careful, everyone's chasing [inflation] up.
“Spreading is beneficial, it helps hard-pressed customers and it helps reduce the inflationary spiral.”
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