The boss of Ofgem has urged the next prime minister to do more to help the country deal with the impact of October's energy price cap rise.
It was revealed by the industry regulator on Friday (August 26) that the energy price cap will see average household bills soar by more than 80 per cent to £3,549 annually. Around 24 million households in England, Scotland and Wales on default energy tariffs will be affected by the change.
The price cap, which determines the maximum amount of money energy suppliers can charge consumers for energy, will come into full effect on October 1 and will remain in place until December 31 when Ofgem will adjust the amount once again. Now many are warning that the change to the price cap will impact a vast number of households across the country.
Read more: Energy price cap will rise to £3,549 in October, Ofgem announces
Jonathan Brearley, Ofgem CEO, said the Government would need to add to the support it announced in May when bills were only expected to jump to £2,800.
“The Government support package is delivering help right now, but it’s clear the new prime minister will need to act further to tackle the impact of the price rises that are coming in October and next year,” Mr Brearley said. We are working with ministers, consumer groups and industry on a set of options for the incoming prime minister that will require urgent action.
“The response will need to match the scale of the crisis we have before us. With the right support in place and with regulator, government, industry and consumers working together, we can find a way through this.”
Liberal Democrat leader Sir Ed Davey said that increased energy price cap is “nothing short of a catastrophe” for struggling households. “The only option is for energy prices to be frozen before these rises wreak havoc on our communities. Then we need a proper plan to be put in place to bring bills down next year,” he said.
“As millions suffer the Conservatives do nothing. No policy from the government, no plan from Liz Truss or Rishi Sunak. They have no idea how much pain these energy prices will cause our country. They are simply unfit to govern.”
Labour shadow chancellor Rachel Reeves said: "Today’s announcement will strike fear in the heart of many families, and force many to make unthinkable choices this winter. The Tories now face an urgent choice.
“They can carry on letting oil and gas companies make huge profits whilst every family suffers with bills rising this winter. Or they can act now and stop the energy price cap rising, by bringing in a windfall tax on those oil and gas profits.
“People deserve a government that can meet the scale of this national emergency – not this spectacle of a Tory leadership race or a Prime Minister that put his out of office on months ago. Labour is on your side, and our fully-funded plan to freeze the price cap will make sure households don’t pay a penny more this winter, saving you £1,000.
“Our mission for home grown renewable energy and to insulate 19 million homes will keep bills down for the long term too.”
Andrew Forsey, national director of anti-hunger charity Feeding Britain, said: “Unless significant additional help is offered by the new prime minister, these eye-watering prices will spring a vicious hunger trap; leaving millions of families unable to afford heating or eating. Eighty years after the Beveridge Report set the framework for a welfare state that could eliminate destitution from our shores, the threat of destitution now hangs over us again like the Sword of Damocles.”
Sara Ogilvie, policy director at Child Poverty Action Group, said: “Today’s energy cap announcement will terrify many low-income families. Their budgets have been overstretched for months, and soaring prices will make it practically impossible to escape the tightening grip of poverty.
“We know that families with children spend 30% more on energy bills than households without kids – yet Government has completely failed to recognise the extra costs facing households with children. The next prime minister will be on a collision course with reality unless they increase support to reflect the scale of need, and uprate benefits in line with inflation.”
Chancellor Nadhim Zahawi said that while the energy price cap rise "will cause stress and anxiety for many people", he assured that government "help is coming".
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