Downing Street has not ruled out the possibility that energy bills could rise by nearly £1,000 for most customers when the regulator reviews the price cap in the autumn.
It comes after the boss of major energy company ScottishPower called on the Government to take urgent action and help the poorest households months before costs are expected to mount again ahead of the winter months.
Keith Anderson said that energy bills are likely to go up by nearly another £1,000 for millions of households around the country when the price cap is reviewed in October.
Given what’s going to happen in October, we think that urgent action is required to put in place a mechanism to support customers through this period
Asked if the Government recognised this figure, and if it was in the “ballpark” of its expectations, the Prime Minister’s official spokesman did not rule it out.
“I can’t comment on speculation – obviously that … wouldn’t be right for me to do so,” he told reporters.
“With Ofgem, I think it’s fair to say that we do expect there to be further increases later in the year, the Chancellor has talked about that and has made clear that we will look to do what we can to help with energy bills in the autumn when we know more about what the prices will (be).”
Mr Anderson said: “Given what’s going to happen in October, we think that urgent action is required to put in place a mechanism to support customers through this period.
“You require a sum of about £1,000 to start bringing bills back closer not to where they used to be, but closer to where it’s realistic to expect people to be able to pay them.”
He called for “targeted” support for the most vulnerable customers.
“This could be for customers with pre-payment meters, those on Universal Credit, or those eligible for the warm home discount.
He said the Government’s plan to give each household £200 towards their energy bill, a sum that will need to be paid back, will be insufficient.
“Our view is clearly now this £200 is not going to be anywhere near enough,” he said.
“This will take time to implement, and it will take time to agree on the exact format of it … that all needs to be debated, signed, sealed, delivered, designed and agreed by July to allow it to be implemented by October.”
He said there are several different ways for the £1,000 to be funded.
“It could for instance be added to all household energy bills over the next decade.
Bills for the average household whose tariff is tied to the energy price cap rose to £1,971 on April 1 after the price of gas soared over previous months.
It forced the Government to promise the £200 rebate on energy bills from October and also knock £150 off council tax for many households.
But many campaigners have warned that this will not be enough, especially next winter if the price cap goes up again, which is widely expected.
ScottishPower believes this might go to £2,900 on October 1.
Mr Anderson said that it will still be some time before predictions are truly accurate.
However “we see no evidence in the form of prices to suggest right now that’s going to change”, he said.
A Government spokesman said: “We recognise the pressures people are facing with the cost of living, which is why we have set out a £22 billion package of support, including rebates and energy bill reductions.
“We also urge energy companies to support their customers as we manage the impact of high global gas prices.
“We are also supporting vulnerable households through initiatives such as the £500m Household Support Fund and the Warm Home Discount, with the Energy Price Cap continuing to insulate millions of families from high global gas prices.”
