Energy UK urges Burnham to act as bills forecast to surge

Energy UK, the trade association for energy suppliers, called on 3 October 2026 for further government action on bills, publishing analysis titled Economic defence: tackling energy bills in winter 2026/27¹. The body said projections for January point to the biggest rise in four years, with the annual bill for a typical household reaching around £2,100, an increase of about £350¹. It said this approaches the level at which the government previously intervened after Russia's invasion of Ukraine¹.

The current price cap, which runs until the end of December, rose by 4 per cent this week, equivalent to £60 a year for a typical household¹. The i reported the increase as an average of £5 a month for homes on variable tariffs, taking the average annual bill to £1,723, with forecasters predicting a further rise of 16 per cent, or £276, next year². Energy UK said customer debt is set to reach a record £7 billion by the end of the year, and that the cost of bad debt to all bill payers has reached an average of £67 a year¹.

Energy UK set out three areas for action: additional targeted support above the Warm Home Discount, using existing data to identify households in need, with tiered rebates as a stepping stone to the social discount scheme it proposed in August; a debt relief scheme for the most severely affected households, alongside measures on new tenants and homeowners, greater use of smart Pay-as-you-Go and fewer customers on Standard Credit, which it said accounts for three-quarters of total debt and arrears; and moving more policy costs, such as the remainder of the Renewables Obligation and the Feed-in Tariff, off electricity bills into general taxation¹. In August it said households in need should receive £450 in rebates a year to address the fuel poverty gap, against the current Warm Home Discount of £150 a year, recently expanded to six million households and extended to winter 2030-31².

"We cannot afford to wait for the same scale of crisis before acting again. We must heed the lessons from that time."

The government has already acted on some costs. VAT was removed from electricity bills, saving households an average of £45 a year, a cut announced in July that came into force on Thursday but expires in April 2027³. Earlier this year, under Sir Keir Starmer, a series of green levies was removed from household electricity costs, cutting the typical bill by £150 a year³. Energy UK said these savings have been wiped out by high wholesale prices, driven in part by international events, and that high wholesale gas prices have led the UK to spend an extra £100 billion over the last five years without receiving an extra molecule¹. The Energy Secretary, Miatta Fahnbulleh, said the government continues to look at what more it can do to protect families from unaffordable bills³.

Why it matters for households

The figures put the coming winter close to the 2022 crisis in cost terms. Energy UK said a £2,500 annual bill at 2022-23 levels would be equivalent to around £2,100 today, because households have cut their energy usage¹. The Energy Price Guarantee, which capped the typical household bill at £2,500, was criticised as poorly targeted because all households were eligible, and cost the Exchequer an estimated £24.8 billion³. Energy UK said the government spent £36 billion supporting all households in winter 2022/23¹.

For a household, the difference between these schemes is where the money lands. A broad cap or VAT cut lowers the unit cost of energy for everyone, while a rebate or debt relief scheme targets a smaller group. Energy UK's argument is that the second approach avoids repeating a universal subsidy¹. Debt is the other pressure point: the £7 billion projected total and the £67 a year added to all bills for bad debt mean households without arrears still pay for those that have them¹. Energy UK also frames electrification as the route to lower exposure to gas prices, which is the link between energy bills and energy independence¹.

What happens next

The January price cap announcement has not been dated in the reports. The VAT cut on electricity bills expires in April 2027³. Energy UK said its proposed debt relief scheme would be launched by the government working with Ofgem, after additional support has been delivered¹. No timetable for that work has been reported.

Sources4 cited

1. Energy UK warns Government: Act now to prevent another energy bills crisis - Energy UK, energy-uk.org.uk
2. The three measures Burnham could use to cut energy bills, inews.co.uk
3. UK faces worst winter energy crisis since 2022, suppliers warn, telegraph.co.uk
4. UK faces worst winter energy crisis since 2022, suppliers warn, telegraph.co.uk