British households face a winter energy crisis as bad as 2022, suppliers have warned, amid calls for ministers to take urgent action to support struggling billpayers.
Energy UK, the industry body that represents suppliers, urged Andy Burnham to move to help the poorest households and continue to remove levies from bills.
The industry group said typical household bills could rise to £2,100 at the start of 2027, the equivalent of £2,500 in 2022, when Russia’s invasion of Ukraine prompted a gas crisis and forced ministers to intervene with the energy price guarantee.
Warnings of soaring energy prices have piled pressure on the Prime Minister to bring in new measures to ease pressure on families.
Mr Burnham has pledged to give households “breathing space” in the Budget after cutting VAT on energy bills.
Dhara Vyas, the chief executive of Energy UK, warned that bills could reach the levels last seen in 2022.
Ms Vyas said: “We cannot afford to wait for the same scale of crisis before acting again. We must heed the lessons from that time.
“The Government must act now to prevent this situation getting worse and causing even more problems over the longer term. Last-minute emergency interventions run the risk of being badly targeted and costing us all more.”
Families have cut back their energy usage in recent years, meaning that an annual £2,500 energy bill at 2022-23 levels would be equivalent to around £2,100 today, according to Energy UK.
The 2022 energy crisis prompted Liz Truss, then prime minister, to unveil the Energy Price Guarantee, which capped the typical household bill at £2,500.
However, the policy was criticised for being poorly targeted, as all households were eligible for the price cap and it cost the Exchequer an estimated £24.8bn.
Iran war disruption
The sharp rise in energy costs this winter follows widespread disruption to gas supplies because of the conflict in the Middle East.
The seven-month upheaval to energy supplies has led to low gas storage levels across Europe as nations head into the winter.
It will take time for countries to replenish their gas stocks, meaning that energy bills could remain high well into spring.
Mr Burnham announced in July the removal VAT from electricity bills, saving households an average of £45 per year. The cut came into force on Thursday but will expire in April 2027.
Earlier this year, under Sir Keir Starmer, the government removed a series of green levies from household electricity costs, cutting the typical bill by £150 a year.
Miatta Fahnbulleh, the Energy Secretary, said: “We continue to look at what more we can do to protect families from unaffordable bills, as we drive down bills for good through clean power.”
