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Cost of living Millions of households to face higher energy bills this winter despite price cap

Industrial reporter

MILLIONS of cash-strapped households are facing higher gas and electricity bills this winter despite a lower energy price cap, the labour movement warned yesterday.

Amid declining wholesale prices, regulator Ofgem announced a new average annual energy cost across Britain of £1,923 from October 1 — down from £2,074.

Typical prepayment meter customers will see their bills falls to £1,949 a year.

But experts warned a decision by Tory ministers to cut government energy support alongside an increase in compulsory standing charges would hike costs for some, while many would see little or no change.

Unite head Sharon Graham, who has led calls for public ownership of the sector, said the outcome is “yet another example of energy companies being left to rake in record profits while the government and its regulator are dancing around their handbags.”

End Fuel Poverty Coalition co-ordinator Simon Francis accused the government of “running out of enthusiasm to help people get through the energy bills crisis and running out of time to act to keep people warm this winter.”

Ofgem’s cap was set at a record high of £2,500 last October following a hike in wholesale costs sparked by Russia’s attack on Ukraine earlier in 2022. A £400 government-backed discount on bills via the Energy Bill Support Scheme helped many keep the lights on.

The initiative was scrapped in March, however, despite 40-year-high inflation and soaring rental and mortgage costs, meaning falling prices will not be passed on to many.

Ofgem also raised this October’s daily cap on gas and electricity standing charges from 82p to 83p yesterday. Households pay this amount — about £303 per year — no matter how much energy they use.

The regulator’s chief executive Jonathan Brearley said: “We know people are struggling with the wider cost-of-living challenges and I can’t offer any certainty that things will ease this winter.”

Labour blasted the situation, saying the “scandalous Tory cost-of-living crisis is still raging for millions of people.”

Shadow energy and net zero secretary Ed Miliband said: “Thirteen years of failed Tory energy policy has left Britain as the most exposed economy in western Europe to the effects of Putin’s war and Britain’s families and businesses are paying the price.

“Higher energy bills are unfortunately here to stay under the Conservatives — even with this fall, bills are significantly higher than they were only three years ago.”

The ex-Labour leader said ministers are “siding with oil and gas companies making record profits over hardworking British families, with their refusal to fix gaping loopholes in windfall taxes or to make the sprint we need for clean power.”

Consumer group Which? urged anyone struggling to contact their energy provider about a “payment plan you can afford and check to see if you qualify for any government schemes.”

Director of policy and advocacy Rocio Concha also said Downing Street “urgently needs to introduce a properly targeted social tariff to help those struggling to make ends meet.”

Disability charity Sense backed the call, warning that high energy bills and other financial pressures are putting disabled people “under huge pressure.”

Chief executive Richard Kramer noted that disabled households “tend to use more energy, from powering wheelchairs and hoists, to using extra heating and fans to regulate body temperature.

“We need the government to do more, including the introduction of a social tariff for energy that recognises the higher costs disabled people face.”


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