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Government urged to act on rising energy prices

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Written by: Emma Lunn
06/01/2022
Industry experts have warned that energy bills could go up by hundreds of pounds each year.

Trade body Energy UK has predicted that gas and electricity bills could rise by a further 50% by spring this year, while fuel poverty charity National Energy Action (NEAh) has warned that gas bills could double

The stark warning piles pressure on the government to introduce new measures to help households with the cost of energy. Wholesale gas prices have continued to climb throughout last year, leading to soaring energy bills.

The energy price cap that will apply from 1 April to 1 September will be announced on 7 February. The rise is expected to be in the region of £600 a  year, meaning the price cap could rise from the current level of £1,277 to about £1,877. Ofcom is currently consulting on recalculating the energy price cap

According to industry insiders, the government is considering various options to help less well-off households. Prime minister Boris Johnson has already refused to cut VAT on energy bills. 

Justina Miltienyte, energy policy expert at Uswitch.com, said: “With predictions of a near £2,000 price cap on the way, many households could be faced with the stark choice of heating or eating if action is not taken to support them in the coming months.

“A 5% VAT cut on energy bills was never going to be enough to offset a predicted 50% price cap increase, but it’s alarming that the government has seemingly scrapped the idea so hastily without an alternative, at a time when consumers are bracing themselves for a catastrophic bill hike.

“We repeat our calls on the government to upscale its targeted support for vulnerable households, in a way that is reflective of the cost increases that consumers will see coming in April.  

“While the government continues to rely on Warm Home Discount as a way to help the most vulnerable, the support is nowhere near enough and the payments should be automatic for all who qualify. Now is the time for the government to act, and fast.”

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