Energy price cap rise could push 'thousands of local people' into fuel poverty, MP claims
- Credit: Archant
An east London MP has warned that thousands of local people could be pushed into fuel poverty “overnight”, ahead of the UK’s planned energy price cap increase.
It is estimated that energy bills could go up £700 per household when the energy price cap, which limits the rates a supplier can charge for their default tariffs, increases in April.
This comes amid this newspaper's There With You This Winter campaign, launched last year as thousands of people across London were set to experience the hardships of fuel poverty as the months get colder.
It is providing advice, support and signposting for those who are struggling.
Jon Cruddas, MP for Dagenham and Rainham, has advocated a windfall tax on energy companies in light of the expected surge in prices.
He said: “There is a global gas price crisis, but a decade of Tory failures on energy policy has left working families uniquely exposed and as inflation spirals out of control, so does the cost of living crisis."
A UK government spokesperson said it "recognises" the cost of living pressures and will provide £12bn in support across this financial year and next.
The Labour MP backed a four-part package of reforms proposed by Citizen’s Advice to help reduce the impact of the price hike.
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The charity suggested an energy support grant be distributed to low-income households through the benefits system.
This would be a one-off payment to all universal credit and legacy benefits claimants, similar to the winter fuel payments paid to pensioners.
It also advocated uprating benefit payments to match the Bank of England's forecasted inflation rate of six per cent in April, rather than the planned rate of 3.1pc established in September.
It further suggested a temporary extension to the warm homes discount, with an increased rebate and expansion of eligible households.
Finally, it advocates for spreading the cost of supplier failures over two to three years.
Under current plans, customers are expected to pay off the majority of the supplier of last resort levy – which covers the cost of ensuring a smooth transition for customers whose energy supplier goes bust – from April 2022, adding an additional £94 to bills over and above planned hikes.
The government spokesperson said cited the household support fund, warm home discount and energy price cap as policies supporting vulnerable households.
"We’ll continue to listen to consumers and businesses on how to manage the costs of energy," they said.