Households across Britain will be hit by a “winter like never before” with people going hungry and cold unless the Government acts swiftly, an energy chief warned on Thursday.
Stephen Fitzpatrick, founder of OVO Energy, which is the UK’s third biggest energy company with 4.5 million customers, pleaded for “very bold” action to help shield families from the “worst of the price rises”. Millions of people are set to see their energy bills sky-rocket from £1,971 to £3,549 in October, and then possibly soar even higher.
Mr Fitzpatrick said: “If we don’t use every available moment over the next 12 weeks to solve this, we are going to see a winter like never before with people going hungry and going cold and the NHS being overwhelmed by the health impacts of the energy crisis.”
With Liz Truss or Rishi Sunak due to become Britain’s new Prime Minister on Tuesday, he stressed: “It’s an opportunity to do something very bold.” He also warned that the country could be facing “years of higher prices”.
Mr Fitzpatrick issued his plea for action as former Cabinet minister Michael Gove said “restraints” on energy use for non-domestic customers may have to be introduced to get the UK through the winter.
Looking longer term, outgoing Prime Minister Boris Johnson on Thursday said Britain should “go nuclear and go large”, as he announced £700 million of Government funding to push ahead with the Sizewell C nuclear power plant project in Suffolk, at an eventual cost of £20-30 billion.
More immediately, Chancellor Nadhim Zahawi stated that no households should have their energy supplies cut off due to the crisis which is being largely blamed on Vladimir Putin’s invasion of Ukraine and his cutting back on Russian gas flows to Europe.
Mr Zahawi told Sky News: “I am working with the companies... to make sure those people who are really struggling get that help both financially and personally.”
However, many charities fear some less well-off people, including pensioners, will effectively cut off their own energy supplies by turning off their heating or not using their cookers.
On Thursday morning, Foreign Secretary Ms Truss gave her strongest signal yet that she will offer more support to households struggling with energy bills, as well as cutting taxes, including reversing the National Insurance contributions hike.
“I will also deliver immediate support to ensure people are not facing unaffordable fuel bills,” she told The Sun. Former chancellor Mr Sunak is proposing temporarily axing VAT from energy bills, as well as more support for the less well-off.
However, the Resolution Foundation warned that the next Prime Minister’s time in office looks set to be dominated by the “terrifying” prospect of the biggest squeeze in living standards for a century.
The think tank said real household disposable incomes are on course to fall by 10 per cent over this year and next, and that the number of people living in absolute poverty is set to rise by three million, to 14 million people in 2023-24, unless policy or economic forecasts change.
Mr Fitzpatrick is proposing a ten-point plan to tackle the energy crisis.
A key plank would be creating a government-backed “Tariff Deficit Fund” which energy companies could borrow from to subsidise bills to keep them artificially low for a certain number of units per household in a lower price band, which all people could access. The debt, expected to run into tens of billions of pounds, would be paid back in future years by keeping bills above the cost of energy.
A similar scheme has already been pushed by other energy bosses but ministers have yet to take up this initial proposal, reportedly amid concerns that it was not sufficiently targeted at low-income households.
Mr Zahawi insisted there was “nothing off the table” to address the cost-of-living crisis and that the next Government will “go beyond” the £37 billion of support already committed.
Former levelling-up secretary Mr Gove said energy rationing should not be imposed for domestic households. But he said: “It may be the case that in certain non-domestic settings that there needs to be some form of restraint in the way that energy is used.”
