The Government should immediately update its package of support to help households with soaring energy bills before the cost-of-living crisis grips even harder following October’s energy price cap increase, according to a new report by the House of Commons Business, Energy and Industrial Strategy Committee.
The report argues that the Government’s Energy Bills Support Scheme will not be enough given the continued rising energy prices households will face. MPs warn that the size of the package has been ‘eclipsed by the scale of the crisis.’
Committee Chair Darren Jones MP said:
Once again, the energy crisis is racing ahead of the Government. To prevent millions from dropping into unmanageable debt it’s imperative that the support package is updated and implemented before October, when the squeeze will become a full-on throttling of household finances and further tip the economy towards recession.
We were told by a number of witnesses, ‘if you think things are bad now, you’ve not seen anything yet’. This Winter is going to be extremely difficult for family finances and it’s therefore critical that public funds are better targeted to those who need it the most.
It’s an injustice that the poorest households continue to pay higher energy costs because they’re on prepayment meters. This must end and a social tariff should be brought forward.
Ultimately, Ministers know that the long-term solution is to reduce our need for energy through insulation works that keep our homes warm in winter and cool in summer. If the Government is really taking this energy crisis and the country’s net zero targets seriously it will come forward with a bold, fully funded, national home insulation program before the end of the year.
A spokesperson for the End Fuel Poverty Coalition said:
MPs are right. The crisis facing millions of homes as energy bills continue to soar is ‘ongoing and severe’.
The energy bills crisis this winter is a nightmare scenario, but the Government is sleepwalking into it.
Tory leadership hopefuls and Ministers need to wake up and announce urgent financial support to offset the predicted price rises this winter and further help vulnerable homes stay warm this winter.
But financial support will only be a stop gap solution.
We also need to see a rapid roll-out of support to make homes and community buildings more energy efficient, a full review of the consumer energy market and action to bring cheap renewable energy on stream as fast as possible.
A spokesperson for National Energy Action added:
Energy prices continue to spiral, and vulnerable households in the energy market are being hardest hit. It is vital that the plans from the UK Government and Ofgem are scrutinised by Parliament, and they act on this credible set of recommendations to help the poorest households through the energy crisis, this winter and beyond.
The next Prime Minister will need to implement these recommendations urgently, topping up the current energy support, announced in May, to offset the October increases. We also agree with the cross-party recommendation to introduce a social tariff to give fuel-poor households deep, enduring protection against persistent high energy prices, and putting in place a new scheme to help households that have accrued a mountain of debt during the crisis. The regulator must also not duck its role in reducing the growing burden of standing charges that are hitting struggling households the most. Overall, it is critical to ensure that pre-payment meter customers do not pay more for their energy and are not punished further as a result of finding their bills already unaffordable.
Finally, the winner of the leadership contest must ensure that reducing the wasted energy in our homes becomes a much more prominent part of the policy response. Improving energy efficiency should be top of their agenda as it will help ease future price spikes now and in the future.