Price Cap Should Be Frozen At Current Rate, Energy Bosses Insist
Energy bosses have called for the price cap to be frozen "roughly" where it is (Alamy)
The energy price cap should be frozen at its current rate, and that will still not be enough to help the most vulnerable, energy bosses have said.
The October price cap will be confirmed on Friday this week, with analysts predicting that annual bills could top out over £3,500, before another rise in January, and again in April. The government is facing urgent calls to address the spike in energy prices, which is expected to plunge a significant number of households into fuel poverty this winter.
Octopus Energy CEO Greg Jackson told BBC Radio Four’s Today Programme that ministers should “freeze the price cap roughly where it is” at £1,971 per year, with energy companies paying back any deficit as prices are coming down.
“The big thing here is we need more help for customers from the government," he explained.
“The reality is customers are being asked to pay the price of gas which is weaponised by Putin, and they shouldn't expect to do that alone."
Downing Street has said no new relief measures will be devised while the Conservative leadership contest to elect outgoing prime minister Boris Johnson's successor is ongoing. Frontrunner Liz Truss has said she would hold an emergency budget if she enters Number 10 on 5 September. This weekend business secretary Kwasi Kwarteng, who is widely tipped to be appointed as chancellor, insisted that "help is coming".
Jackson believes there are "a couple of things" the government could do to alleviate the impact on households.
“You could double the existing support package or many of the energy companies now favour a programme where you do something called tariff deficit fund," he continued.
“Essentially we freeze the price cap roughly where it is and fund that during times when energy prices are very high, pay it back when they're coming down.
“And what that would see is prices staying around where they are now – which is still, by the way, two thirds above where they were a year ago.”
Utilita CEO Bill Bullen agreed, and described the government as currently “chasing this problem” when instead they “need to get ahead of it”.
“We're due to announce a price increase on Friday and frankly, we shouldn't be doing that,” Bullen said.
“We've got to freeze prices at the current level.
“That's not going to be enough, even still for those customers who are on low incomes and vulnerable – maybe got some medical dependency.
“So some extra help is going to be required, but that will be a minority of homes.
“The reality is when you get up to £3,500 a huge number of homes won't be able to afford this and this situation has accelerated quite rapidly over the last couple of months.”
Reflecting on the prospect of further rises in the coming months, he added: “It's just crazy. We just cannot be expecting consumers to pay this money."
At the end of last week, Labour leader Keir Starmer called on the government to bring back MPs two weeks early to discuss freezing energy bills.
In a letter to the Prime Minister and both Conservative leadership candidates, the party demanded that Parliament be resumed on 22 August, rather than on 5 September as planned.
“Across Britain, people are having to make unthinkable choices about how to pay their bills, causing endless worry for households and businesses,” Thangam Debbonaire MP, shadow leader of the Commons, wrote.
“That is why I am writing to you today to urge you to bring Parliament back early on Monday 22 August so that we can freeze the energy price cap now ahead of winter.”
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