The Government’s plans on energy bills will “bring immediate relief” to struggling families, the boss of the UK’s biggest energy supplier has said. However, consumer groups have warned that many people would still struggle with “sky high” bills this winter.
Chris O’Shea, chief executive of British Gas owner Centrica, promised to continue donating 10% of profits to help vulnerable households. These households are still facing doubled energy bills despite the support announced on Thursday.
“We know people are deeply worried about the increase in their energy bills this winter,” Mr O’Shea said. “Extraordinary circumstances call for us all to think differently and we know this bold customer support package from the new Prime Minister and Chancellor will bring immediate relief to hard-pressed households.”
It comes after Prime Minister Liz Truss announced a support package that will cap bills at £2,500 for the average household from the start of October. It takes off the pressure for now, said Energy UK, the trade body for energy suppliers,
“We shouldn’t forget, though, that many households are already struggling with the bill rises so far, and wider cost-of-living challenges, and suppliers continue to do all they can to provide extra support to those that need it most,” said its director of advocacy, Dhara Vyas.
She called for focus to now turn to bringing down costs for customers by insulating Britain’s leaky housing stock and investing in wind and solar power. But Truss’s plan included no new promises on renewable energy, instead focusing on fracking and North Sea oil and gas. It also included nothing on insulation or other forms of energy efficiency.
Ofgem boss Jonathan Brearley said: “Ofgem welcomes this significant and unprecedented support for energy consumers across the country. It’s been clear to Ofgem and the Government since we announced the new price cap that the new Government would have to act urgently and decisively to support consumers and this package of support will be welcomed by millions across Britain.”
ScottishPower chief executive Keith Anderson said: “Now we have an immediate solution for households the energy industry needs to lead a three-pronged attack to tackle the issue at source by weaning the country off fossil fuels, doubling down on cheap, clean renewables and, importantly, decoupling electricity prices from gas.”
Citizens Advice chief executive Dame Clare Moriarty said: “Today’s announcement hits the brakes before October’s terrifying price hikes become reality, and will come as a huge relief to millions of households. But energy bills are still sky high.
"A freeze may not be enough to reverse the devastating trend in people coming to us because they’ve run out of food or can’t top up their gas and electric. The Government needs to stand ready to provide more support for people on the very sharp end of this crisis.
“Crucially, we also need the details on how this will be paid for. We don’t want to see costs added to customer bills down the line.”
She added: “And Ofgem must make energy companies play their part. No-one should be chased for a debt they can’t pay or force people onto a prepayment meter this winter.”
Citizens Advice said it was helping more than two people every minute with access to crisis support, such as food banks and charitable grants. More than 137,000 people had been referred for this type of support – a 50% increase on the same period last year, and a 167% increase on the same period in 2019.
So far this year, the charity had supported more than 50,000 people with energy debts, a 22% increase on the same period last year. Which? described the price freeze as a “bold intervention”.
Rocio Concha, Which? director of policy and advocacy, said: “This is a bold intervention that will provide huge relief for many and prevent millions of households being left in the cold. However, even with this help, it’s likely that some consumers will still struggle to afford higher energy bills this winter and the Government may need to provide additional support for those on low incomes.
“As part of their plans to shake up the energy market, the Government must commit to reform retail energy pricing so it works for the long-term. These reforms should include protecting those on low incomes as well as reviewing how standing charges and tariffs for prepayment customers could be made fairer.
“The Government must also go all out to turbocharge the adoption of energy efficiency measures, such as home insulation, and make sure that a temporary suspension of green levies does not delay the UK’s transition away from fossil fuels.”
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