Energy Bosses To Be Summoned By MPs Over Looming Winter Bills Crisis
Campaigners have warned a combination of high energy bills and debt repayments this winter will leave many households serious financial distress. (Alamy)
The energy security and net zero (ESNZ) select committee of MPs is set to summon industry bosses as concern begins to grow concerns over a double whammy of energy debt and high energy bills this winter.
Angus MacNeil, independent MP for the Na h-Eileanan an Iar constituency in Scotland, and chair of the crossparty ESNZ committee of MPs, told PoliticsHome energy companies and consumer groups will be quizzed about the growing issue of energy debt in September.
The chair said growing energy debt is an "unfortunate problem", and that the committee would also be looking at other energy challenges causing household bills to remain high, including infrastructure issues like insulation.
"It'll be our first inquiry, we will be taking evidence from some of the energy companies and consumer organisations to give us a picture for the year coming ahead – and how consumers will be impacted, and to identify the sort of actions that are going to be required to avoid similar energy bills [as last year] for many over the coming winter," MacNeil said.
The energy price cap is expected to be around £2,000 in January 2024, around £500 less than January 2023. But people will still face higher bills than than the previous year because the £66-a-month energy bill rebate households were provided with will not be in place.
The cost of energy began to soar at the end of 2021 as the world exited lockdown, and was exacerbated by Russia's invasion of Ukraine in February 2022. Russia was one of Europe's biggest gas and oil suppliers at the time.
The latest figures from the Office for National Statistics (ONS) earlier this month showed that gas and electricity prices rose 36.2 per cent and 17.3 percent respectively in the 12 months to June 2023.
According to data from Pay.UK and Vocalink, on average electricity and gas payments have almost doubled since May 2020 from £108 to almost £200 in June 2023.
In a demonstration of the scale of the issue, debt charity StepChange found in June 2023 the proportion of their new clients with arrears with dual fuel bills stood at 56 per cent. For gas, the number was 29 per cent, and electricity was 28 per cent.
National Energy Action (NEA) director of policy Peter Smith has warned "those on lower incomes are increasingly falling into debt" and that "it’s clear this winter is going to be another very tough one".
“We are approaching two years of the energy crisis, which has had an extraordinary impact on household finances, with energy bills remaining historically high for the foreseeable future. Those on lower incomes are increasingly falling into deep debt," Smith said.
"If we reach this winter with energy bills at a similar level to what they were last winter, but with the added pressure of millions already behind on their bills, it will be disastrous.
“The regulator Ofgem, suppliers and the UK Government need to step in ahead of this winter to support households with their energy debt.
"We would support the introduction of a ‘help to repay’ scheme to provide repayment matching and the option to write off debts for people dealing with unaffordable arrears. Debt collection practices also need urgent reform."
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