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Cost-of-living payments branded insufficient as energy bills soar
27th July 2022
UK Ministers must offer bigger cost-of-living support payments as energy bills are expected to soar further this winter, a committee of MPs has said.
Financial help for the vulnerable and poor needed to be "updated" to reflect higher bills in October, they said.
Witnesses told the Business Committee: "If you think things are bad now, you've not seen anything yet."
Its report also called energy regulator Ofgem "incompetent". Ofgem said it was working hard to reform the market.
In recent days, millions of low-income households on benefits have been receiving the first £326 instalment of payments to assist with the rising cost of living.
Further payments will come later in the year, including extra support for pensioners and people with disabilities, and a £400 discount on everyone's domestic energy bill.
Those payments were set when the typical energy bill was anticipated to rise by £800 - a prediction Ofgem says is now too low. Influential industry analyst Cornwall Insight has predicted a rise of more than £1,200 a year in October, pushing the typical bill to £3,244 a year from October, then £3,363 a year from January.
A normal bill at present is about £2,000 a year, which follows a £700 a year rise in April.
The Business Committee's report said the government's support package was "no longer sufficient".
"The impact of the energy price crisis on households is likely to cause an unacceptable rise in fuel poverty and hardship this winter," the report said.
"The government must immediately update its support, targeting this at customers who are on low incomes, fuel poor, and in vulnerable circumstances, and develop a scheme to support vulnerable customers to accelerate the repayment of energy debt resulting from this crisis." Read More