Energy regulator Ofgem announced today that the price cap will rise to £3,549 from October.
Amid the worsening cost of living crisis, the average household's yearly bill will rise by more than 80 per cent to around £1,971. The cap will come into effect for around 24 million households in England, Scotland and Wales on default energy tariffs on October 1, and will remain in place until December 31, when it will be adjusted again.
But what is being done to help? Although some schemes and measures have already been announced by the government, the new Prime Minister will need to take 'urgent action' to help those struggling to heat their homes this winter, Ofgem’s chief executive has warned.
READ MORE: Energy price cap will rise to £3,549 in October, Ofgem announces
Jonathan Brearley directly warned the two prospective Conservative party leaders - Rishi Sunak and Liz Truss - that they will have to 'act further' to tackle the worrying rises. "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", he 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."
Boris Johnson's successor will take their place in No 10 on September 5, so a nervous wait on finding out what help will be made available is likely between now and then. Throughout their leadership campaigns and hustings, both Mr Sunak and Ms Truss have been questioned on their prospective plans.
Here is how both candidates have pledged to help with soaring energy bills.
Rishi Sunak
Rishi Sunak has pledged to cut VAT on energy bills and provide 'direct support' to those on the lowest incomes and pensioners. Speaking to broadcasters ahead of hustings in Birmingham, he said: "I’d cut VAT on energy bills to provide some support to everyone, but I want to provide direct financial assistance to two other groups of people – those on the lowest incomes and pensioners, because those people will need extra help this autumn and winter and I know things are difficult and I want them to be reassured that with me as prime minister, they will get the help that they need."
Mr Sunak previously ruled out Labour’s plan to freeze the energy price cap if he is made prime minister. He said this was not 'the right approach'.
He said he wanted to keep 'any one-off borrowing to an absolute minimum' and would 'first seek efficiency savings across Whitehall to provide direct support for families to help with the unprecedented situation we face'. As chancellor, Ms Sunak introduced the temporary energy profits levy in July, after Labour repeatedly called for a windfall tax.
Liz Truss
Liz Truss has pledged 'immediate support' to ease the sting of spiralling energy bills. The Foreign Secretary acknowledged the strain is 'clear' at the checkout and the petrol pump, but insisted that Britain will 'get through these tough times' – vowing to ensure help is 'on its way'.
Ms Truss previously signalled she could help firms and households with soaring energy bills with direct support this winter. She was looking at assistance 'across the board' despite in the past insisting she was focused on slashing taxes, rather than what she termed 'giving out handouts'.
What do you think of the plans? Have your say in our comments below.
She has also pledged to 'fix the problems at the heart of this energy crunch at their source' by 'radically' boosting domestic supplies. Writing in the Daily Mail, Ms Truss said: "The impact on our cost of living is clear at the supermarket checkout, at the petrol pump and on our latest energy bills.
"I know how hard it is for millions of Britons, and how grave concerns are about the consequences of today’s decision by Ofgem on the next energy price cap. The rest of Europe is facing the same challenge, which will loom large as winter sets in.
"If I am elected leader of the Conservative Party and prime minister, I will take decisive action on entering No 10 to provide immediate support, but will also tackle the root causes of these issues so we are never again in this difficult position. To those of you feeling the squeeze, my message is clear: I will ensure support is on its way and we get through these tough times."
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