Brits face highest price cap in three years as energy bills rise 4% since October | Energy bills
Millions of households in Britain will face the highest energy rates in three years this winter after months of rising market prices caused the government’s price cap to rise for the second time in three months.
Gas and electricity prices will rise 4% from October with the new energy price cap, months later up 13% in early July to take into account the skyrocketing prices in the global energy market caused by the war against Iran.
Britain’s energy regulator OfgemaIt said the new rate was equivalent to £1,723 a year for a typical household’s gas and electricity use, compared with the increase to £1,663 for the July to September period.
As the bill rises in consecutive quarters, the typical household will pay an extra £350 a year more than in 2024, when the Labor government came to power with a promise to reduce bills by £300 a year by the end of the decade.
Miatta Fahnbulleh, the Energy Secretary, said Tuesday that she understood why people were worried and frustrated about energy bills and that the government was “doing everything we can to make them more affordable.”
Responding to public questions on social media platform Reddit, he said: “For a start, we removed VAT from electricity bills to give everyone a break. This is on top of the £150 we removed from energy bills in the April budget.”
Rising energy costs have revived calls for the government to help vulnerable households. There have been repeated calls for the government to fund additional measures by increasing windfall taxes on profits made by energy companies and introducing a windfall tax on banks.
“It’s just common sense,” said Paul Nowak, general secretary of the TUC. “Banks are making money while many across the country struggle to get by – they may as well afford to pay more taxes to ease the pressure on workers.
“Too many are skipping meals, dipping into their savings and having to cut back on life’s essentials. That’s why Andy Burnham is right to prioritize the cost of living. But the scale of the crisis means the government will have to continue to implement measures to improve living standards, starting with a tax on huge bank profits to reduce energy bills for most households.”
Ofgem’s equivalent annual bill figures were calculated based on a new estimate of typical household energy consumption, which recognizes that customers are using less electricity and gas due to rising prices.
Under the previous system, phased out last month, the maximum price for July was £1,862 a year.
More than a third of households have started turning down the temperature of their washing machines and radiators in empty rooms since 2023, according to research commissioned by the End Fuel Poverty Coalition.
Meanwhile, about a fifth of households have started going to bed early to stay warm or heating just one room to save energy, the survey found.
Simon Francis, convener of the End Energy Poverty Coalition, said: “Some reduction in energy use could be a good thing, due to greater energy efficiency in homes. But unfortunately, for many homes, reductions in energy use have occurred simply because people cannot afford to use as much energy as they did in the past.
“That means some are demonstrating dangerous behaviour, such as reducing washing time and, for one in 10 members of the public, skipping hot meals to save energy.”
The government’s clean energy plan has been criticized by the Conservative Party, which has claimed that grid upgrades and market balancing costs needed to support a renewable energy boom were contributing to high electricity costs in the UK.
Fahnbulleh said: “More renewables will mean gas will be priced less often. That’s why our push toward clean energy is so important.”
