The British government has to do more to help consumers deal with an impending surge in energy bills, a parliamentary committee said.
(Bloomberg) — The British government has to do more to help consumers deal with an impending surge in energy bills, a parliamentary committee said.
The government needs to refresh its support for households before October, when an upper limit in energy prices will be hiked, the Business, Energy and Industrial Strategy Committee said in a report Tuesday.
Energy prices are just one leg of a cost-of-living crisis in the UK, where petrol and food costs are also surging, and inflation is heading for double digits — the fastest in four decades.
The report warned that a planned £400 ($480) discount on energy bills for every household in October won’t be enough to support lower-income families, while some help will go to those who don’t need it or who own multiple homes.
“To prevent millions from dropping into unmanageable debt it’s imperative that the support package is updated and implemented before October, when the squeeze will become a full-on throttling of household finances and further tip the economy towards recession,” Darren Jones, chair of the BEIS committee, said in a statement.
The report urged the government to consider introducing a social tariff to help the most vulnerable, while keeping the rest of the market on a relative tariff to cap the difference between the cheapest and most expensive rates.
This winter, average household bills in the UK are set to be almost three times the level of last year.
The government has already announced £37 billion in aid for households, but the worsening squeeze will put pressure on the country’s next prime minister to do more. The committee also criticized regulator Ofgem’s “incompetence over many years” which has led to households paying for the collapses of suppliers.
The report further urged the government to launch a national home insulation program as a more permanent measure to push costs down as volatile gas prices are expected to be a longer-term concern for the nation.
Aside from helping with heating costs during winter, better insulation would help to cool homes in the extreme heat, as the country works toward its goals of achieving net-zero emissions by 2050.
“If the Government is really taking this energy crisis and the country’s net zero targets seriously it will come forward with a bold, fully funded, national home insulation program before the end of the year,” Jones said.