Average energy bills will fall slightly in the three months from October – to £1,923 a year for the typical household, the regulator Ofgem has said
This is a drop of £151 on the current annual energy bill for a typical household, which is currently £2,074.
But there are complications!
The drop is in the price per unit of electricity and gas, and standing charges – that are charged daily regardless of energy use, are set to rise to recoup the costs associated with the wave of supplier failures, consumer defaults, and additional support to shore up energy companies’ finances.
This means people who use less energy – logically, poorer people – will end up paying more for it.
The Resolution Foundation has explained the situation in a press release here. I’ll pull out the important bits:
Any family with an energy consumption less than four-fifths of the average will see higher bills this winter than last, a situation that applies to around one-in-three (35 per cent) of households in England and close to half (47 per cent) of those in the lowest income decile.
For some, these extra costs will be substantial: 13 per cent of households (2.7 million families) face energy bills rising by more than £100 this winter, a figure that rises to one in four (24 per cent) for the poorest households.
The removal of the flat £400 Energy Bill Support scheme, which was paid out in monthly instalments over winter 2022 to all households, regardless of income or energy consumption, is in effect putting upward pressure on every household’s bill this winter.
Whether a household faces a lower bill this winter depends on whether the lower per-unit prices provide savings that outweigh the higher standing charges and removal of the £400 support.
The Resolution Foundation expects 7.2 million households will end up paying more, with 2.7 million spending more than £100 more on gas and electricity bills – including 24 per cent (almost a quarter) of those in the poorest 1/10 of families.
The Conservative government doesn’t care about this increased pressure on the poorest.
Here’s Tory mouthpiece Andrew Bowie (he’s an under-secretary for “Nuclear and Networks”, whatever that means), refusing to discuss the issue with the BBC’s Naga Munchetty and determinedly trying to force the subject back to the reduction in bills for the very richest people:
— Saul Staniforth (@SaulStaniforth) August 25, 2023
We may draw just one conclusion from this:
Conservative government energy policy is to make the poorest pay the most (as a proportion of their available funds). They are using energy bills to create poverty.
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