THE energy price cap, set by Ofgem and which took effect today, could have been £500 lower if it reflected Britain’s “broken energy system,” campaigners said.

Insulating homes, reducing standing charges and removing VAT from energy bills would have reduced the cap to £1,071.98 — £496.62 lower than what the average household is going to be paying, according to an analysis by the End Fuel Poverty Coalition.

The new price cap will lower energy bills by around 7 per cent, but forecasters expect the cap to rise again by around 10 per cent in October.

Campaigners suggest that a social tariff — a discounted bill for those most in need — could be paid for by the £427 billion in profits that have been generated by the whole energy industry since the start of the energy bills crisis. 

They have also urged the next government to introduce an energy debt-matching programme funded by the £1.3bn customers who are paying through their bills this year to help suppliers recover customer debts. 

Warm This Winter spokesperson Fiona Waters said: “Energy bills will go up again in October and years of staggering prices have taken their toll. 

“Customers are already £2,500 out of pocket because of Britain’s broken energy system and now we know they are going to continue to be penalised if we don’t see the reforms we need.

“As well as the plans to insulate homes, bring down standing charges and provide support through a social tariff, we also need to see new renewables schemes that, according to the House of Commons Library briefings, are able to generate electricity more cheaply than fossil fuels.”

Some 6.1 million households are still struggling to pay their energy bills, according to the latest figures from National Debtline.

Steve Vaid, chief executive of the Money Advice Trust, which runs the helpline, said: “As millions of people worry about keeping up with their energy payments, arrears levels have continued to increase and many have been left with unaffordable debts as a result.

“What we need to see from the next government is urgent action through a help to repay scheme to help people trapped in energy debt access a safe route out.”