Rising energy bills ‘difficult’ for people, Andy Burnham says

Thank you for registering.

Key points

• This would put an average January bill up to £1, 872 a year, £149 higher than October's £1, 723.
• Shadow energy secretary Claire Coutinho remarked: Labour promised to cut energy bills by £300, but they have gone up by almost £400 instead.
• It would be the equivalent of £1, 941 per year based on its previous calculations, up from £1, 862 at present.
• Citizens Advice chief executive Dame Clare Moriarty remarked: Today's rate cap rise pushes energy rates to a three-year high.
• Simon Francis, co-ordinator of the End Fuel Poverty Coalition, remarked: As with previous rises, it is the rate of gas driving this latest growth.

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in. Swipe for next article.

Prime Minister Andy Burnham has remarked rising energy bills are "difficult" for residents after Ofgem raised its cost cap by 4% to a three-year high and analysts forecast a further 9% hike from January.

Speaking to reporters from a supermarket in London, the Prime Minister remarked: It's challenging for individuals and I recognise that.

But it's why, within days of taking office, I confirmed that we would remove VAT off electricity bills to provide individuals that little bit of assist. That kicks in from October.

We know the cost cap will have an impact, but it is what we can do right now.

"We'll continue to look as we go forward at how we get energy prices down in the long term, and that's what we need to do too."

In practice, the regulator remarked its rate cap will rise by £60 per year – or £5 per month – to £1, 723 for the average household using both electricity and gas if this level was sustained for a year.

In practice, the growth reflected higher wholesale gas costs since of the ongoing conflict in the Middle East, with volatile global markets remaining the dominant driver of rate changes.

In a further blow for households, analysts at Cornwall Insight published their latest forecast on Wednesday for a further 9% rise to the cost cap in the new year.

Neil Kenward, Ofgem's director-general for markets, remarked: High international gas costs are continuing to drive energy costs in the UK.

We welcome the Government's intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter.

Savings are available by choosing a fixed tariff. It are available at £100 or more below the October cost cap, and numerous suppliers offer tariffs with cheaper electricity to smart meter customers for electricity consumed out of peak times.

"It's also worth considering different payment methods, with prepayment customers paying the lowest price cap rates, and it could save consumers an average of about £45 compared to direct debit."

Consumer groups and campaigners remarked the removal of VAT has done little to offset the rising rate of energy for households.

Citizens Advice chief executive Dame Clare Moriarty remarked: Today's rate cap rise pushes energy rates to a three-year high. It's another sign of the relentless erosion of living standards nationwide: energy bills are simply too high, rates leapfrog incomes and debt levels continue to grow.

The Administration has already taken positive action to cut levies and VAT on electricity, but the impact of the conflict in the Middle East means residents still face rising costs. We need further bold action to protect those most at risk of being trapped in cold, dark homes this winter.

"The Government must commit to funding a reformed energy support scheme for those who need it most, like single-parent families and disabled people."

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, remarked: As with previous rises, it is the rate of gas driving this latest growth. Every unit of gas applied will be significantly more expensive than last winter and more than 150% higher than at the end of 2020.

Cost rises fall hardest on the households who can least afford them, with millions forced to pay more for the same energy or ration the energy they apply even further.

"Cutting VAT on electricity and last year's extension of the warm home discount was a start, but ministers need to go further and faster in helping people."

For context, the latest cost cap is based on Ofgem's updated definition of a typical consumer. It came into effect from July to reflect falling household energy apply.

For context, the rose October cap, which will remain in place for three months, will come into force as households start to rise their energy usage further by using their heating more regularly, adding to bills.

Energy Secretary Miatta Fahnbulleh remarked: Families will be understandably concerned concerning the cost of energy bills this winter. It is being driven up by the Iran war.

Energy is an everyday essential and it needs to be affordable for everyone. It is why we have cut VAT on electricity bills from October, to offer families some breathing space.

"This has limited the rise in the price cap and follows the £150 in costs we removed from bills earlier this year, and we will keep looking at what more we can do to protect families from unaffordable bills."

"Our cheap power plan would cut energy bills for households and businesses by scrapping Administration taxes and levies on bills, and it wouldn't cost the taxpayer a penny. We have to put cheap energy first."

Ned Hammond, Energy UK's deputy director for customers, remarked: This latest rise is in line with the predictions and any such rise is always more worrying over the winter months when customers naturally employ more energy.

Coming off the back of a significant hike over summer, this further intensifies the challenges faced by customers struggling to afford their bills.

As well as measures to improve targeted backing, the Administration needs to assess how to bring bills down over the longer term.

The impact the conflict in the Middle East has had on gas rates underlines why we need to move to using more of our own sources of clean energy.

"But it's equally true that we need to look at a fairer way of funding the policy and system costs that are also driving bills higher."

Taken together, the developments around rising energy bills 'difficult' for people, Andy Burnham says point to a situation that is still moving, and the coming days should bring more clarity.