After the government reversed course on a planned cut to household support, ministers are under pressure to reveal plans for a social tariff to assist Britons who struggle with their energy bills in the long run.
The government announced the energy price guarantee would remain at the current rate, which caps a typical annual household bill at £2,500, the morning of chancellor Jeremy Hunt's budget speech. A further three months are added from April, when it was scheduled to terminate, until the end of June.
Forecasters predict that the wholesale cost of energy will decline considerably over the summer, negating the need for additional government assistance beginning in July.
Default energy price cap v the government’s energy price guarantee
Campaigners and the energy sector applauded Hunt's U-turn, but Nigel Pocklington, CEO of the supplier Good Energy, claimed it should have been made public sooner. According to him, the delay has put pressure on households that are already struggling and attempting to make plans for the future.
Households that are already under stress due to the expense of living will feel some relief as a result of the chancellor's action. The one-time $400 assistance, which was provided over the winter in equal monthly payments, is still scheduled to expire on April 1.
Martin Lewis, a consumer advocate, praised Hunt on Wednesday but stated that more was required. Practically speaking, people will continue to spend more than they have in the past, but at least some of the anticipated increase has been delayed.
Age UK and StepChange, a charity that helps people with debt, have teamed up with energy providers to launch a campaign urging politicians to create a social tariff. "We are convinced that the right approach is a properly funded energy social tariff and we are disappointed that there was no announcement formally committing the government to this today," said Caroline Abrahams, charity director at Age UK. a
Michael Lewis, the chief executive of E.ON, demanded that a social tariff with a refund, as suggested by Citizens Advice last week, be put into effect by the spring of 2019.
The chief executive of Centrica, the company that owns British Gas, Chris O'Shea, declared on Tuesday that he had changed his mind and now backed a social tariff that was paid for by general taxes rather than a surcharge on the bills of other customers.
The state subsidies on energy bills, according to the government, have "cut the typical family energy bill by over £1,300 since October" and that keeping them at their current level would save an average household £160 overall.
The energy price guarantee will remain in place until the summer, when gas prices are anticipated to decline, the prime minister, Rishi Sunak, said. "We know people are concerned about their bills increasing in April.
Hunt's U-turn is anticipated to cost the government about £3 billion, taking the total cost of the energy price guarantee to about £29.4 billion.