The boss of UK energy company Ovo has set out a plan for the government to subsidise gas and electricity bills amid the cost-of-living crisis.
Stephen Fitzpatrick, the founder of the Bristol-headquartered energy firm, has put forward a 10-point action plan that he says will see the poorest families get the most support.
Under the plan, every household would get some help towards bills, but low-income families would be prioritised in a similar way to how the tax-free allowance works. Meanwhile, support would taper off for high earners using more electricity.
Mr Fitzpatrick is also urging the government to bring forward support measures, saying the £400 help towards bills – and up to another £650 for those on qualifying benefits – should be made in full before Christmas.
He told the BBC that helping low-income families with energy bills “has to be the first order of business” for the next prime minister.
“If we don’t use every available moment over the next 12 weeks to solve this, we are going to see a winter like never before, with people going hungry and going cold and the NHS being overwhelmed by the health impacts of the energy crisis,” he said.
It comes after industry regulator Ofgem last week confirmed that energy bills for the 24 million British households on the price cap will rise by 80% in October from £1,971 to £3,549. Further eye-watering increases in the cap are due in January and April.
The action proposed by Ovo – the UK’s third largest energy firm – also calls for the higher charges faced by pre-payment customers to be scrapped as it branded them a “poverty penalty”.
The group added the standing charge, which customers pay regardless of their energy use, should be abolished, arguing it is “the single biggest source of customer confusion on energy bills, and causes the greatest resentment”.
It also unveiled a £50m support plan for its own 4.5 million customers, including debt repayment holidays for all prepayment meter customers, a 200% increase in emergency top-up credit for customers on a pre-payment meter, as well as free technology and services, such as smart thermostats and boiler checks.
Mr Fitzpatrick said: “Important and difficult decisions need to be made quickly. Some of these will need to take immediate effect, some in the months and years ahead. But we must start now. At Ovo, we will continue to play an active role in proposing solutions, and putting our customers’ interests at the heart of the response.”
The Resolution Foundation warned on Thursday (September 1) the next prime minister’s time in office looks set to be dominated by the “terrifying” prospect of the biggest squeeze in living standards for a century.
Inflation is already running at 10.1% but the Bank of England has forecast that higher gas prices will push the Consumer Prices Index above 13% by the end of the year. Citigroup warned last week that inflation could hit 18.6% in January, the highest in almost half a century, while some experts are even predicting it could surge past 20% in the UK as the energy crisis mounts.
The British Chambers of Commerce (BCC) has already called on the government to hand more power to Ofgem – as well as cut VAT and introduce pandemic-style emergency grants – in order to help businesses facing rocketing costs.
