Fresh calls for government to halt rise in energy bills guarantee by 20% in April

The government has already announced more targeted energy bill support for vulnerable households

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The government faces fresh calls to ditch the plan of raising the level of the Energy Price Guarantee by 20% to £3,000 in April.

In his Autumn Statement, the Chancellor said the current EPG will be less generous, with average households facing bills of £3,000 per year.

Martin Lewis, Founder of MoneySavingExpert, joined other charities that have already campaigned for the postponement of the plan.

In a letter to Chancellor Jeremy Hunt, endorsed by major charities, Mr Lewis said: “I would ask you to urgently consider postponing that increase. This cannot wait until the Budget – in practice, energy firms will need to know much sooner if the planned rise isn’t happening on 1st April, or they are bound to have to communicate to customers that it is coming.

“This decision to increase prices was made at a time when wholesale rates were looking to be far higher than they are now. In fact, on current predictions, the EPG subsidy may well only be needed from April to July. After that, the underlying price cap, currently looks like it may be cheaper even the current EPG rate of £2,500 a year for a typical household.”

Charity National Energy Action has estimated that without intervention, the number of fuel poor households will rise from 6.7 million to 8.4 million from April.

A HM Treasury spokesperson told ELN: “Wholesale prices falling is good news, but as we have all seen, prices are volatile and can increase as fast as they fall. If prices return to their late August level, the government would need to borrow an extra £42 billion and potentially increase taxes to continue funding the EPG at current levels.

“The way the EPG operates means households will still see lower bills if gas prices continue to fall. To support families in the meantime, we are providing millions of vulnerable households with £900 in direct cash payments this year, plus a record increase in the National Minimum Wage and a 10% uplift in working-age benefits and the state pension.”

ELN has approached the Department for Energy Security and Net Zero for comment.

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