The three measures Burnham could use to cut energy bills

Britain is to face the worst winter energy crisis since 2022 suppliers warn, as pressure mounts for ministers to draw up emergency plans to cushion the blow for households. Energy UK, the body that represents energy suppliers, has urged Andy Burnham to help households in need and continue to remove levies from bills with the average annual energy bill expected to surge in the winter. The organisation said that household bills could rise to £2,100 by January, approaching the cost levels of 2022 when Russia’s invasion of Ukraine forced ministers to intervene in the resulting gas crisis. Burnham has pledged to give households “breathing space, that can take the pressure off”, cutting VAT to the sum of £45 from electricity bills. But Energy UK said this will not go far enough, with customer debt projected to reach £7bn by the end of the year. Bills increased by 4 per cent on Thursday 1 October, an average of £5 a month for homes on variable energy tarrifs. The average annual bill will now be £1,723 but next year, forecasters predict it will rise by 16 per cent or £276. The support measures Burnham shoud enact Energy UK wants the Government to deliver targeted support above the current Warm Home Discount in the form of rebates and launch a debt relief scheme for billpayers. In August, it said households in need should receive £450 in rebates a year to effectively address the fuel poverty gap. The current discount of £150 a year was recently expanded to six million households, with the scheme being extended to winter 2030/31. Dhara Vyas, the chief executive of Energy UK, warned energy bills could reach the levels last seen in 2022 this winter. The body has also suggested a debt relief scheme for the most adversely affected and removing further levies from bills and placing them on general taxation. Vyas said: “We cannot afford to wait for the same scale of crisis before acting again. We must heed the lessons from that time. “The Government must act now to prevent this situation getting worse and causing even more problems over the longer term. Last-minute emergency interventions run the risk of being badly targeted and costing us all more. “This immediate action must be followed by more permanent measures to tackle the problems of high energy bills and debt – including their effect on inflation and the wider economy – which we know will persist otherwise.” Middle East crisis causing prices to rise The energy crisis in 2022 prompted then prime minister Liz Truss to cap bills at £2500 with the Energy Price Guarantee. As energy usage has gone down in recent years, Energy UK said that the £2,500 annual bill would be equivalent to £2,100 by today’s energy levels. The steep rise in energy prices follows widespread supply disruption because of the conflict in the Middle East. Gas storage levels across Europe have dwindled as a result of the seven-month upheaval to energy supplies. Countries will need time to replenish gas stocks meaning bills could remain high into the spring months. Earlier this year, under Kier Starmer’s government, a series of green levies were removed from electricity costs, cutting typical bills by £150 a year. Secretary of State for Energy Security and Net Zero, Miatta Fahnbulleh MP, said: “I know energy price rises weigh heavily on homes across the UK this winter. “Our VAT cut will give households some much needed breathing space, making the energy price cap £45 a year less than it would have been. This follows the £150 of costs we removed from bills earlier this year. “Alongside this, we continue to look at what more we can do to protect families from unaffordable bills, as we drive down bills for good through clean power.”