Labour’s plan to tame household energy bills this winter does not provide enough support for vulnerable customers, warned the boss of a leading UK supplier.
Bill Bullen, chief executive of Utilita Energy (Utilita), argued that freezing the price cap at £1,971 per year was still too high for the poorest energy users, and that the plan was “not targeted enough.”
Instead, he called for a “social tariff” to provide long-term relief to low-income households.
He told City A.M.: “We believe a social tariff, funded by the Treasury, must happen. It’s a longer-term sensible solution and not a sticking plaster fix that might need to be administered again – at great cost – a matter of months down the line.”
Labour has called for the price cap to be frozen this winter, funded by an expanded windfall tax and through scrapping the support packages unveiled by Government earlier this year.
The energy chief questioned the opposition’s mooted support for consumers, as it would provide the same relief to the highest earners in the country alongside the lowest earners.
He also raised concerns over previously announced interventions by former Chancellor Rishi Sunak – who offered £400 savings for every household alongside additional support to lower income customers in May earlier this year.
Bullen said: “While the direction of travel is welcome, Labour’s plans – much like Sunak’s support packages announced in February and May respectively – are simply not targeted enough.”
He also criticised Government inaction over the energy crisis, with departing Prime Minister Boris Johnson unlikely to unveil any plans, meaning the country would have to wait until a new leader was chosen on 5 September.
This is despite a hike in the price cap this winter being expected for months – with Cornwall Insight now forecasting bills will climb to £3,582 per year in October.
The energy analysts forecast the price cap will climb over £4,000 in the winter, and peak in April at £4,426 per year.
It also predicts energy bills will remain elevated in 2024, having previously anticipated a plateau next summer.
The ramp-up in price cap forecasts follows a Russian squeeze on European energy supplies, which has exacerbated disruption across the continent.
Other groups have made similarly gloomy predictions, including Investec, BFY Group and Auxilione – which has calculated the cap could hit £5,000 next year.
He concluded: “We’ve known for a long time a big price rise, which will hit the fuel poor and vulnerable the hardest, was on its way in October, yet there has been a lack of bold thinking. This has left millions of households worrying about how they will pay for future energy bills.”
Utilita is an electricity and gas provider, home to over 850,000 customers – a near three per cent share in the market.
The company specialises in pre-payment deals. offering pay-as-you-go energy to consumers.