Social Justice

Energy bosses warn cost of living crisis will get 'truly horrific' when bills rise again in October

Scottish Power CEO Keith Anderson called on the government to take "radical action" to help households with energy bills before they rise again.

Gas hob

Energy bills are set to rise again in October. Image: Pixabay

The CEO of Scottish Power has warned of a “truly horrific” winter for millions of households when energy bills rise again in October.

Speaking before the Business, Energy and Industrial Strategy (BEIS) committee, Keith Anderson called on the government to take more “radical” action to assist households with energy costs.

“The size and scale of [the crisis] is beyond what I can deal with, what the industry can deal with”, Anderson said.

“Come October [things] are going to get horrific, truly horrific,” he added.

Following the hearing, Labour’s shadow climate secretary Ed Miliband said it was “shameful” the government wasn’t doing more to tackle the cost of living crisis, and said Labour would cut energy bills by levying a windfall tax on oil and gas producers.

The BEIS hearing was held to discuss energy pricing as millions saw their bills rocket this month thanks to the removal of the price cap. 

Bosses from E.ON, EDF, Scottish Power and Centrica all agreed that the government must do more to protect the poorest households from rising costs, noting a significant increase in the number of customers calling with concerns about paying their bills

Anderson said Scottish Power had seen 8,000 calls from customers worried about paying their bills, while EDF noted a 40 per cent increase. 

Earlier in the year, the government announced a £200 energy rebate to be awarded to households in October, when energy costs are expected to rise again.

The scheme has been criticised for being an inefficient way of dealing with the crisis, given it is a loan which must be repaid in instalments on future bills. 

In the BEIS hearing, Anderson proposed a “social tariff” to cut £1,000 off bills for poorer households, paid for by removing the price cap for better-off households.

He stressed the worst is yet to come for customers, with bills set to jump again in October to, estimates suggest, around £3,000 a year. 

All four energy bosses admitted that their customers are struggling with debt, and said that an increase in calls was putting immediate pressure on company resources. 

The customer service rating for all four companies has dropped below an average of four on the Citizens Advice scorecard as phone waiting times have increased in recent weeks. 

Miliband said: “As energy bills rise by record amounts for millions of families, it is shameful that Boris Johnson and Rishi Sunak are refusing to support the British people facing a cost of living crisis.

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“It tells you everything you need to know about this government that they stand by whilst working people, families, and pensioners suffer. Britain deserves better. All they have to offer is a Buy Now Pay Later loan scheme that will saddle families with higher bills in years to come.

“Labour would introduce a package of real support to bring down bills by up to £600, funded by a one-off windfall tax on the oil and gas producers making record profits.”

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