Government support for households facing rocketing energy bills is “much too low” to prevent a “catastrophic” crisis this winter, an energy boss has warned.
Echoing forecasts that more than half of British housheholds – equating to some 45 million people – will be trapped in fuel poverty by January, EDF director Philippe Commaret said the energy firm had already witnessed a 30 per cent rise in calls from customers struggling to pay their bills this year.
Regulator Ofgem’s price cap is expected to soar by 80 per cent to £3,553 in October, with some analysts now predicting it could hit £4,567 in January and then £5,816 in April – leading to inflation “entering the stratosphere” at 18.6 per cent.
The energy firm is looking to work with Boris Johnson’s successor “as soon as” they enter Downing Street in September to find ways to help customers with their bills, said Mr Commaret, urging ministers to also consider “enduring” solutions, such as insulating homes.
While Tory leadership contender Rishi Sunak has pledged more direct financial help for people strugging with the cost of living crisis this winter, frontrunner Liz Truss has denounced the idea of further “handouts”. Both candidates, however, have touted the idea of scrapping VAT on household energy bills.
Mr Commaret, EDF’s managing director for customers in the UK, told the BBC’s Today programme on Tuesday: “I think that cutting VAT is really important because at the time being with the rise of the electricity and gas bills, in fact, the revenues for the government are paradoxically increasing, so it’s not fair, I think.”
The energy firm is launching a campaign to help provide customers with “further support to help them cut their costs” and to “make sure they are accessing all the available support that is available to them”, Mr Commaret said.
But he added: “I have to mention that we face, despite the support that the government are already announced, a dramatic and catastrophic winter for our customers.
“In fact, in January half of the UK households might be in fuel poverty. That’s the reason why we want to take actions in order to do everything we can do in order to help our customers.”
His comments come a day after the bosses of two other energy suppliers also urged the government to provide more help for consumers.
Utilita chief Bill Bullen urged the Conservatives to end their leadership contest two weeks early and install a new prime minister within days “for the good of the nation” – calling it “imperative” that the energy price cap rise in October does not go ahead.
Also touting the idea of “doubling” the government’s existing support package, Octopus energy founder Greg Jackson also said many suppliers were now in favour of essentially freezing the energy price cap and introducing a “tariff deficit fund” – which would see the sums owed paid back over a far longer period.
Mr Commaret said on Tuesday that EDF would also support such a scheme if it were supported by longer-term solutions to help reduce consumers’ costs, such as insulating UK homes.
Meanwhile, it emerged that a routine emergency planning exercise to help the UK wargame for the possibility of gas supply shortages has been doubled from two to four days this year.
The National Grid exercise will reportedly see those involved explore potential scenarios such as electricity rationing.
Downing Street insisted on Monday that people should carry on using as much energy as they want because there is no risk of winter blackouts – despite reports of warnings to the contrary.