It’s been quite a month since the government’s fiscal statement on September 23. Policies on taxation and spending were introduced and explained, only to see them reversed again.
A new Chancellor, and now a new Prime Minister, will bring yet more change.
Last month, Which? wrote in these pages about the government’s support package to help people pay their energy bills. Which? was one of a number of organisations calling on ministers to do more amid predictions that annual energy bills could top £6,000 come January.
The government introduced its Energy Price Guarantee (EPG) – a freeze on the unit prices for gas and electricity. This meant an average user on a standard variable tariff (SVT) would save around £1,000 on the £3,549 cost of annual energy bills announced by the energy regulator Ofgem in August.
The scheme freezes current unit rates at around 34p per kWh of electricity and 10.3p per kWh of gas.
Last Monday, the new Chancellor, Jeremy Hunt, announced that the EPG will last for only six months, rather than the previously promised two years. So the obvious question now is: what happens when it ends?
The Chancellor did give some clues, but was tight-lipped. He said that funding the EPG, and continuing to expose public finances to volatility in gas prices, was ‘not responsible’.
A review will be led by the Treasury into what happens after April 2023. The new approach will ‘cost the taxpayer less than planned’ and will ‘support those in need,’ Hunt said.
This lack of clarity has caused concern for consumers, who are now contemplating possible annual energy bills of more than £4,000.
That would be intolerable for millions, even at the best of times. But when the cost of living is soaring, forcing other bills up, it would be absolutely devastating.
The government must clarify how it will support consumers after April next year – it’s clear that while the most financially vulnerable will need the most support, many households that don’t fall into the traditional benefits system will also be affected
The government must also ensure that the adoption of energy efficiency measures – such as home insulation – is turbocharged, so that households’ energy bills are reduced in the long term. There is more for businesses in the energy sector to do to support their customers through this difficult time, too.
We think energy providers can play their part in three key areas:
Firstly, energy bills must be clear and easy to understand so that every customer knows what they’re paying and why.
Secondly, customers on prepayment meters, who are more likely to be vulnerable and on lower incomes, must be able to access the financial support they are entitled to in a clear and straightforward way, and should be prioritised in the smart meter rollout.
And finally, providers’ customer service centres must be adequately staffed and resourced to ensure they can meet the higher levels of communication demand from customers.
Good, helpful and efficient service is always important, but at a time when millions are worried about their energy bills, it is vital.
Help with energy costs
Details of what comes after the EPG may take some time to emerge given the current Downing Street reshuffle. But, in the meantime, here are a few things concerned customers could be doing to reduce their bills.
If you’re on a traditional prepayment meter, be sure to claim for the £66 (£67 from January) electricity bill discount you’re entitled to. You’ll be sent a voucher code to claim wherever you usually top up. Over the six-month run, this adds up to £400. Unfortunately, scammers are trying to take advantage of consumer uncertainty. Remember that energy providers will never ask for your personal details, especially any banking information.
Check you are receiving any benefits to which you are entitled, such as the Cold Weather Payment or Winter Fuel Payment.
Check your eligibility via the government’s Help For Households website or the charity Turn2us.
Finally, submit regular meter readings and keep an eye on your energy account payments to make sure you are only paying for what you use, and that your direct debit payments are set at a reasonable level.
Energy companies are obliged to help you if you tell them you can’t pay, and they will not disconnect you.
Let them know you are struggling with your bills and that you want to establish a payment plan that works for you. Discuss whether you can lower your direct debits, and whether you’re eligible for any private hardship funds.
For more information go to which.co.uk
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