As the government reversed course on a proposed cut to household support, ministers are under pressure to disclose plans for a social tariff to assist Brits who are having long-term financial difficulties paying their energy bills.
The government announced the continuation of the energy price guarantee, which caps yearly family bills at £2,500, the morning before chancellor Jeremy Hunt’s budget statement. It will now last three more months, to the end of June, from April, when it was scheduled to expire.
Forecasters predict that the cost of electricity at the wholesale level will decline dramatically throughout the summer, so more government assistance may not be required starting in July.
Campaigners and the energy sector applauded Hunt’s U-turn, but Good Energy’s CEO, Nigel Pocklington, claimed that it should have been made public sooner. “The delay has caused unnecessary stress and anxiety for hard-pressed households who are trying to plan ahead during these difficult times,” he stated.
Households that are currently under stress due to the expense of living would feel less strain as a result of the chancellor’s decision. Yet the $400 one-time assistance, which was given during the winter in equal monthly installments, is still scheduled to end on April 1.
On Wednesday, the consumer activist Martin Lewis appreciated the move and thanked Hunt but said more was needed. “In practical terms, people are still going to pay more than they have been, but at least some of the planned rise has been forestalled.”
To devise a social tariff, campaigners including Age UK and the debt charity StepChange has joined forces with energy suppliers, requesting that ministers step in. The charity director at Age UK, Caroline Abrahams, stated: “We are convinced that the right approach is a properly funded energy social tariff and we are disappointed that there was no announcement formally committing the government to this today.”
As advocated by Citizen Advice last week, the E.ON chief executive, Michael Lewis, exclaimed for a social tariff involving a repayment to be enacted by next spring.
On Tuesday, the chief executive of the British Gas owner, Centrica, Chris O’Shea, conveyed that he now supports a social tariff, funded by general taxation rather than a premium on the bills of other customers.
As per the government statement, state subsidies on energy bills had “cut the typical family energy bill by over £1,300 since October” and their current level was worth £160 and maintained the total support for an average household.
The prime minister, Rishi Sunak, expressed: “We know people are worried about their bills rising in April, so to give people some peace of mind, we’re keeping the energy price guarantee at its current level until the summer, when gas prices are expected to fall.”
The government bill for the energy price is guaranteed at an estimated £29.4 billion after the U-turn by Hunt and is anticipated to cost roughly £3 billion.
- Published By Team Timeswire