Households Face Further Energy Bill Hikes Amid Global Shocks
Ofgem set to announce new price cap as government plans VAT cut on electricity bills from October.
Callum Smith
Typical household energy bills are projected to increase by another 4 per cent, reaching an equivalent of £1,729 annually.
Critics question how Mr. Burnham will fund this VAT cut for electricity bills, having attacked his plans as 'unfunded'. They claim the digital ID scheme itself had been 'unfunded', meaning a huge hole exists in Mr. Burnham's spending plans.
A government spokesman declared, "Tackling the cost of living remains a key priority for this Government and we know families will be worried by the prospect of higher energy bills this winter."
The government has provided extra support for six million families with its £150 warm home discount, though Labour reportedly removed £150 from energy bills in the budget in April.
We’re acting to give consumers breathing space with the cost of living – cutting VAT on energy bills, ensuring around six million households get the £150 warm home discount this winter, and making millions of homes cheaper to run through our warm homes plan.
The spokesman added, "We’re acting to give consumers breathing space with the cost of living – cutting VAT on energy bills, ensuring around six million households get the £150 warm home discount this winter, and making millions of homes cheaper to run through our warm homes plan."
Energy firms have banked more than £6 billion in UK profits this year alone, even as household energy prices are set to increase further.
The rise in the price cap is attributed to increased wholesale gas costs, with the Middle East conflict reportedly impacting wholesale energy prices.
Separately, heatwaves across Europe are understood to have increased gas demand for power generation.
A government spokesman stated, "Alongside our efforts to support rapid de-escalation in the Middle East, we will do everything we can to shield consumers from global energy shocks and bring down bills for good."
Miatta Fahnbulleh, however, claims that help might only reach 'vulnerable' households, despite policy costs funding important initiatives like supporting vulnerable consumers.
Fahnbulleh also stated, "I completely understand why people are worried and frustrated about energy bills and we are doing everything we can to make them more affordable."
Dhara Vyas commented that "Too many households continue to feel the strain of high energy bills," arguing that current arrangements fail to provide the necessary help.
Vyas further argued, "Instead of relying on stop-gap, ad hoc or emergency measures, we need a better, targeted and more permanent way to give people confidence that they’ll get help when they most need it."
Approximately 40% of billpayers are on fixed energy tariffs and will not see their prices rise until their current tariff ends.