Energy firms urge more help for people struggling with bills

The bosses of four major energy firms have called on the government to do more to help people struggling with soaring energy bills.

Keith Anderson, chief executive of Scottish Power, told MPs "so many people are really going to struggle" after prices rose by 54% from 1 April.

But he warned further rises forecast in October were going to be "horrific".

E.ON boss Michael Lewis said efforts by the government to soften the blow of higher prices were "not nearly enough".

Scottish Power's Mr Anderson spoke to MPs on the Business, Energy and Industrial Strategy Committee alongside E.ON's Mr Lewis, Simone Rossi the chief executive of EDF, and Chris O' Shea the boss of British Gas owner Centrica.

Mr Anderson said his company had 8,000 calls with concerns about paying bills since the price for a household using a typical amount of gas and electricity increased by £693 on average - from £1,277 to £1,971 per year - at the start of April.

But he said his biggest concern was when prices are due to rise again in October, "particularly around the most vulnerable and poorest".

"In summer consumption goes down. Come October that's going to get horrific, totally horrific," he said.

Mr Anderson said the energy price crisis had now "got to the stage now where I believe the size and scale of this is beyond what I can deal with, it's beyond what I think this industry can deal with".

The Scottish Power boss said the government should set up a "deficit fund" and wipe £1,000 off the bill of anyone who is deemed to be in fuel poverty and on pre-payment metres, which would be repaid by all customers or the government.

Mr Anderson said such a policy was required for people in fuel poverty that "puts their bill back to where it used to be before the gas crisis".

But he said in the future the government should scrap the energy price cap - the maximum price suppliers in England, Wales and Scotland can charge households - and introduce a "social tariff".

He said a social tariff would be "targeted to discount the price" to people in fuel poverty.

"The cost of that should be borne by those who can afford to pay," Mr Anderson added.

Mr Lewis, chief executive of E.ON, supported the idea of a social tariff but said the government could do more in the short-term situation which he said was something he had "never" seen in his 30-year career.

He said if the government did not provide more support for households, E.ON forecast debt would increase by 50% - about £800m - by the end of the year and 30-40% of its customers would "go into fuel poverty".

To date, the government has said it will offer extra relief worth a total of £350 via the council tax system in England and in October customers in England, Scotland and Wales will receive a £200 rebate on their energy bills.

They will have to repay this at £40 a year for five years, starting in April 2023.

The warm house discount scheme is also being expanded to cover three million households. It offers low income households a one-off annual discount on their electricity bill, and was worth £140 in 2021-22.

Mr Rossi added the government support for bill payers announced in February was "proportionate at that point", but added things had got worse as a result of the war in Ukraine.

Meanwhile, Mr O'Shea said 10% of Centrica customers - about 716,000 households - were in £440 of debt on average compared to 125,000 at this time last year.

"It will get worse with out any further intervention," he said.