Labour ministers are looking at “a range of support” for vulnerable households struggling with rising bills, the Energy Secretary has said ahead of an expected energy price cap hike.
Miatta Fahnbulleh said she could “completely understand” why people might be worried about soaring costs but pledged the Government was “getting on with the job of driving bills down”.
Ofgem will announce the October energy price cap tomorrow.
The average domestic energy bill will increase by four per cent, reaching £1,792 from October 1, Cornwall Insight estimates.
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This would mark a £66 increase for a typical household – more than the £43 saving Andy Burnham achieved through cutting VAT on energy bills.
When asked whether the existing £150 warm home discount is enough, the Peckham MP Ms Fahnbulleh indicated households most in need could be in line for more support,
In an “ask me anything” session on Reddit, she said: “I know in Peckham that our warm home discount will assist nearly a third of households.
“It’s a start, but I also know that households struggling need more help.
“That is why we are looking at a range of support for vulnerable households that are under pressure.
“From long-term targeted bill support through to upgrading millions of homes with measures that can save over £500 on bills.”
Ms Fahnbulleh also suggested there could be changes to the fixed charge on bills paid every day regardless of energy usage.
She wrote: “I know for lots of people, standing charges are a real bugbear. The reality is that they cover fixed costs that we have to pay to keep the energy system running.
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“We understand that for some, this is too expensive. But removing those costs would simply increase prices elsewhere on the bill, so we are working closely with Ofgem to look into how these fixed costs could be recovered in the fairest way.”
Urged to remove all policy costs from bills, Ms Fahnbulleh said the Labour Government had “started” doing so, including by ditching an energy efficiency programme which was paid for through levies on bills.
She said: “These policy costs fund important things like supporting vulnerable consumers with the costs of their bills and upgrading the energy system so that we can lower bills.
“We have already started doing this and did so at the budget, where we took a load of policy costs off of bills. We’ll keep looking at how these costs are recovered in the fairest way.”
The Energy Secretary continued: “I completely understand why people are worried and frustrated about energy bills and we are doing everything we can to make them more affordable.
“As a start, we removed VAT from electricity bills to give everyone some breathing space.
“This is on top of the £150 we removed from energy bills in the budget in April.
“We are providing extra support for six million families under pressure with our £150 warm home discount. “But we know there is more to do and we are getting on with the job of driving bills down.”
Trade association Energy UK estimates energy debt currently stands at £6billion and is likely to hit £7billion by the end of the year.
It has called for more targeted support and said the Government should take a range of factors into account to see who most needs help.
It says suppliers can “provide a huge amount of support” if customers are struggling.
Octopus Energy, the country’s largest electricity supplier, operates a £40million customer help fund.
It also offers support schemes including standing charge waivers and free electric blankets.
Eligible customers at Ovo can qualify for direct financial support with their bills while the British Gas Energy Trust, a charity funded by British Gas, helps those struggling with energy debt across England, Scotland and Wales.
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