UK energy suppliers press government over winter bill rises
Energy suppliers in the United Kingdom are pressing the government to act immediately as households face another rise in energy costs this winter. The trade body Energy UK said higher domestic gas prices and forecasts of a sharp increase in January mean delay could deepen the pressure on consumers. The warning comes as millions of households on variable tariffs remain exposed to the regulator's price cap.
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The latest figures cited by the industry point to a 4% increase in bills at the start of October for households in England, Scotland and Wales on Ofgem's capped tariffs. That rise was described as the equivalent of about £60 a year, or around £5 a month, taking a typical annual bill to £1,723 if sustained for a full year. Cornwall Insight has since forecast that the same typical bill could climb to £1,999 in January, a much steeper jump that would add to winter pressure.
Energy UK said the government had already taken some steps to ease costs, including cutting VAT on electricity bills and moving some levies into taxation earlier this year. But it argued those measures had been offset by high wholesale prices, which suppliers pay, and by wider international disruption affecting energy markets. The trade body linked the pressure in part to conflict in the Middle East and disruption to shipping through the Strait of Hormuz, while also comparing the current situation with the price shock seen in 2022 after Russia's invasion of Ukraine.
The issue matters because energy bills remain one of the most sensitive household costs in the UK and can quickly feed into wider inflation and consumer debt. Energy UK said growing customer debt is now adding an average of £67 a year to everyone's bills, underlining how unpaid balances are being spread across the system. That makes the current rise not only a household affordability problem but also a broader market and policy issue for the government and regulator.
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The price cap set by Ofgem limits the maximum price suppliers can charge per unit of gas and electricity, but it does not prevent bills from rising when wholesale costs increase. Around 20 million households are affected by the cap on variable tariffs, making the forecast January increase potentially significant in scale. Prime Minister Andy Burnham said the government was considering any measure that would take the pressure off, but no new intervention was announced in the material provided.
What remains unclear is which, if any, further measures ministers may choose before the next price cap change. Energy UK said it did not want policymakers to wait for a crisis on the scale of 2022 before acting again. The next key point to watch is whether the government responds to the suppliers' call with direct support, tax changes or other relief before January bills are set.
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