Charities and the energy sector have joined calls from consumer rights champion Martin Lewis for the Government to provide more support on energy bills from 1 April 2023, the End Fuel Poverty Coalition said on 1 February 20231. A public petition has been launched by campaign group 38 Degrees1.
Lewis wrote to the Chancellor asking the Government to keep the Energy Price Guarantee at a typical £2,500 a year, rather than raising it to £3,000 a year as planned1. Over 70 organisations have backed the call, including Age UK, Christians Against Poverty, the End Fuel Poverty Coalition, Warm This Winter, the Centre for Sustainable Energy, Energy Action Scotland, Scope, FareShare, the Joseph Rowntree Foundation, Nesta, Sense, Leonard Cheshire and Mencap1. Energy UK, the trade association for the energy industry, has also supported the call1.
The coalition said the £400 Energy Bills Support Scheme ends at the same time, so households would see the real cost of their bills rise by around 43 per cent from an average bill of £2,100 this year1. It said the package of support for the most vulnerable households in 2023/24 risks being even less than this winter, when there were 9 million people living in cold damp homes1.
The letter argued that circumstances had changed since the decision to raise the guarantee was taken, when wholesale rates were expected to be far higher than they are now1.
"In fact, on current predictions the EPG subsidy may well only be needed from April to July. After that, the underlying price cap currently looks like it may be cheaper than even the current EPG rate of £2,500 a year for a typical household."
The letter added that provisioned Government expenditure on the energy subsidy will be billions less than expected when the plans were made, giving headroom to enable a postponement, and that maintaining a lower guarantee would also help reduce inflation1. It said energy firms will need to know much sooner than the Budget whether the rise is going ahead, or they are bound to have to tell customers it is coming1. Lewis described failure to act as a "national act of self-harm"1.
Why it matters for households
The guarantee sets a limit on the unit cost of gas and electricity for a typical household, so the planned change from £2,500 to £3,000 would raise the underlying cost of every unit used from April1. Because the £400 Energy Bills Support Scheme also ends at that point, the coalition's figure of a 43 per cent rise in the real cost of bills reflects both changes arriving together, not the guarantee alone1. For a household, the difference between the two rates is the gap between what the guarantee currently absorbs and what it would absorb after April, which is why the level of the price cap matters to energy bills and energy independence as well as to monthly outgoings. Households carrying debt built up over winter may find the support available changes at the same time; the British Gas Energy Trust is one route to grants for energy debt.
What happens next
The letter asks the Chancellor to consider postponing the increase urgently, and states the decision cannot wait until the Budget because energy firms need notice before 1 April1. No Government response to the call, and no date for a decision, has been reported1.
Sources1 cited
- Experts rally to support calls for better energy bill support - End Fuel Poverty Coalition, endfuelpoverty.org.uk