Millions of people face “unmanageable debt” if the government does not renew its energy support package by the winter, MPs have warned.
A series of measures aimed at helping people pay their bills were unveiled earlier this year as prices skyrocketed due to massive increases in wholesale energy costs.
Most families will receive at least £400, with more for vulnerable groups such as pensioners, the disabled and those on low incomes.
But this was when the energy price cap rose by 54% to £1,791 for the average household and it was forecast to rise to around £2,800 in October.
The last estimate is October’s increase will see the price cap reach £3,244 and the Business, Energy and Industrial Strategy Committee said it would mean more help was needed.
Darren Jones, chairman of the committee, said: “Once again, the energy crisis is before the government.
“To prevent millions of people from falling into unmanageable debt, it is imperative that the support package is renewed and in place before October, when the squeeze becomes a complete breakdown of household finances and the economy spirals into recession.”
The commission has been hearing from experts, ministers and industry insiders for months, and Mr Jones said the message was: “If you think things are bad now, you ain’t seen nothing yet.”
“This winter will be extremely difficult for family finances, and therefore it is very important that public funds are better directed to those who need it most,” he added.
The commission proposed removing the energy price cap in favor of a discounted tariff for the most vulnerable.
They said there were also issues with the support package that needed to be addressed, including multiple payments for people with multiple homes.
Ofgem is not tough enough on new suppliers
A committee of MPs also said £94 should be added to bills to cover the cost of dozens of suppliers failing over a year.
It accused the regulator Ofgem of “years of incompetence” which had allowed poorly run companies to set up business as energy suppliers.
“Ofgem failed to use its existing powers and failed to take action against energy suppliers even when it was clear they should,” the committee said.
“Lacky energy regulator Ofgem enabled now-bankrupt energy companies and inexperienced CEOs to drive up energy costs even further.”
Feeding the children first
Paul Ridley, a father of two with special needs, told Sky News that due to the crippling cost of living, he was shopping “less and less” and had to prioritize getting his children to eat.
She is a full-time unpaid caregiver to her son, Keith, who has autism, epilepsy, irritable bowel syndrome and depression, and who is at home with her 24 hours a day, seven days a week.
Even if they find a place for daycare for her, she doesn’t know how much they will pay her and if she can afford transportation there and back because she doesn’t have a car.
The family is already struggling to collect his medication from various pharmacies in the city.
Mr Ridley said: “For ministers and MPs looking at this, come and live in my world for a week… Try to be a carer with all these costs and rising energy costs.”
Mr. Ridley’s son’s needs are such that they often have to use a washing machine. Also his medicine needs to be kept cold, both of which require energy.
Stress
He says he has seen his home energy bill rise from £200-£400 a month to at least £700.
The stress of his financial situation also takes a toll on Keith, exacerbating his condition.
Mr Ridley said: “He doesn’t understand the bills and that the prices are going up. But she accepts everyone’s stress and anxiety.
“Even though we hide it, she is sensitive and when she thinks something is bothering dad, it affects his health.
“That can lead to more epileptic episodes and partial seizures, which also affect his IBS, and we’re in a never-ending cycle.”
Earlier this month, Jonathan Brearley, chief executive of Ofgem, admitted that there should have been tighter controls On new entrants to the energy market.
Isolate houses “street by street, community by community”
The BEIS committee also said that while the government could increase support for bill payers, a better long-term strategy would be to reduce energy demand.
The UK has the worst levels of home insulation in Europe and the committee said a fully funded national campaign to insulate homes “street by street, community by community” is needed.
Mr Jones said: “Finally, ministers know that the long-term solution is to reduce our energy needs through insulation works that keep our homes warm in winter and cool in summer.
“If the government is really serious about this energy crisis and the country’s net zero targets, it will deliver a bold, fully funded, national home insulation plan by the end of the year.”
“We are also investing £6.6bn this Parliament to improve the energy efficiency of homes, delivering an average saving of £300 a year.”
