Energy bosses demand urgent changes to prevent fuel poverty

Energy bosses demand urgent changes to prevent fuel poverty

Energy bosses have urged changes to the price cap and aid to be delivered to help those in need.

Chief executives for some of the largest energy suppliers in the UK have called for the price cap to be eradicated, and for a new system to be implemented to remove the price burden on the most vulnerable. 

The announcement follows growing concerns for the upcoming winter period amid the worrying cost of living crisis. 

According to Sky News, chief executives told MPs currently investigating energy prices that they should anticipate a stark increase in the number of people falling into “financial distress” once the price cap increases again from October. 

In April, the cap increased by a record £693 per year on average. 

Pre-payment customers, who typically tend to be the most vulnerable, were particularly hit hard as they faced significant increases. 

The Business, Energy and Industrial Strategy (BEIS) committee heard Keith Anderson, ScottishPower chief executive, call for the price cap system to be scrapped and replaced by a social tariff. 

The proposed plan would see the better off pay more. 

He added that a deficit fund should be put in place which would allow those struggling to be given up to 10 years to pay off £1,000 on their bills. 

Mr Anderson has described the energy crisis that families are subject to as “horrific” before outlining his plan. 

“I think the problem’s got to a size and scale where it requires something significant of that nature where, for those people who are deemed to be in poverty…, that puts their bill back to where it used to be before the gas crisis”, he said.

Additionally, his counterpart at E.ON, Mike Lewis, issued concerns that suggested around 40% of households faced fuel poverty from October. 

Mr Lewis supported Mr Anderson’s social tariff notion but urged the government to do more than a singular Council Tax rebate and energy loans. 

He added that the UK government needs to remove VAT and green levies from energy bills in the short term. 

The UK’s largest energy supplier has witnessed an increase of 125,000 households in debt within the last year said Chris O’Shea, the boss of British Gas-owner Centrica. 

He added that around 715,00 people already owed money to British Gas but expects the number to climb to an unprecedented level. 

It is understood that the typical annual energy bill will face an increase of £500, according to research from Cornwall Insight. 

If correct, the figure for the ‘average’ annual bill would hit £2,450.