Nearly 200,000 people on benefits could have their debts to their energy supplier cancelled, if they make some effort to pay what is owed.
Unpaid bills and fees have soared in recent years with energy prices so high, leaving a record £4.4bn owed to suppliers.
Up to £500m could be knocked off the total under plans that regulator Ofgem wants to take effect early next year.
But that will also require the cost to be covered through an extra £5 added to everyone’s gas and electricity bill.
By recovering or cancelling up to £500m, the first phase may only reduce the rate of increase in customer debt, rather than reverse it.
I’m on Universal Credit and I’ve managed to pay my bills – sometimes by switching the heating off when I really needed to have it (the classic choice between “heating or eating”).
I don’t want to vilify other people for keeping their heating on and racking up debt instead, only to have it written off; for me, the answer is to reduce energy bills.
Why can’t the government and energy companies manage that?
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Debt relief doesn’t reduce energy bills directly – the Ofgem scheme would forgive some historic debts for people on benefits, but it adds around £5 a year to everyone else’s bill to cover the cost.
That’s shifting the cost to the wider population rather than tackling the root cause: high energy prices.
The choice between heating or eating is still confronting many people – even with debt relief, bills remain high. So people who managed to pay despite hardship end up carrying more financial discipline while others’ past debts are wiped.
It doesn’t feel fair, because the structural issue—energy pricing—isn’t fixed.
Energy bills are so high because the system is complicated – part of it is wholesale energy costs, which surged after global price spikes; part is about profit margins and the regulatory framework for network companies.
While MPs want to use windfall profits to fund relief, Ofgem says renegotiating price caps could end up costing consumers more, which shows how hard it is to shift money around without unintended consequences.
Ofgem does want to bring in longer-term fixes – The BBC article mentions requiring tenants and homeowners to actively sign up to energy accounts and switching smart meters to pre-payment mode to prevent historic debt from accumulating.
These measures may prevent future debt from spiralling, but they don’t address high ongoing bills – and actively deny heat to homes in some cases.
Debt cancellation is a sticking-plaster to hide the wound; it relieves symptoms but not the disease. The intention here seems to be to:
Deal with past debt rather than future bills – forgiving historic arrears doesn’t reduce the astronomical £1,755 annual bills people face; and
Avoid tackling corporate profits or energy prices directly – MPs have called for using network companies’ windfall profits, but the regulator and government are reluctant.
Real relief comes from:
Energy efficiency improvements (insulation, better heating systems, smart meters)
Regulatory reforms that limit the cost burden on vulnerable households
Genuine reductions in wholesale or retail energy costs
but none of those measures are forthcoming.
This is a chance for Starmer to say he’s doing something.
But it doesn’t mean he’s doing the right thing.
The right thing is to cut fossil fuels out of UK energy consumption – starting with gas. We have no expected date for this to happen.
The right thing is to cut private profit out of energy provision by taking the greedy private energy companies back into public ownership. The government has no intention of doing that.
The right thing is to put the best interests of the people of the UK ahead of the profits of private shareholders. Keir Starmer is deaf to such pleas.
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Starmer’s ‘sticking-plaster’ politics: putting some energy debts on other people’s bills
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Around 200,000 people on benefits could have their energy bill debt cancelled under a proposed Ofgem scheme – and I can’t say I’m happy about it.
Here‘s the BBC:
I’m on Universal Credit and I’ve managed to pay my bills – sometimes by switching the heating off when I really needed to have it (the classic choice between “heating or eating”).
I don’t want to vilify other people for keeping their heating on and racking up debt instead, only to have it written off; for me, the answer is to reduce energy bills.
Why can’t the government and energy companies manage that?
Let’s go into the details:
Debt relief doesn’t reduce energy bills directly – the Ofgem scheme would forgive some historic debts for people on benefits, but it adds around £5 a year to everyone else’s bill to cover the cost.
That’s shifting the cost to the wider population rather than tackling the root cause: high energy prices.
The choice between heating or eating is still confronting many people – even with debt relief, bills remain high. So people who managed to pay despite hardship end up carrying more financial discipline while others’ past debts are wiped.
It doesn’t feel fair, because the structural issue—energy pricing—isn’t fixed.
Energy bills are so high because the system is complicated – part of it is wholesale energy costs, which surged after global price spikes; part is about profit margins and the regulatory framework for network companies.
While MPs want to use windfall profits to fund relief, Ofgem says renegotiating price caps could end up costing consumers more, which shows how hard it is to shift money around without unintended consequences.
Ofgem does want to bring in longer-term fixes – The BBC article mentions requiring tenants and homeowners to actively sign up to energy accounts and switching smart meters to pre-payment mode to prevent historic debt from accumulating.
These measures may prevent future debt from spiralling, but they don’t address high ongoing bills – and actively deny heat to homes in some cases.
Debt cancellation is a sticking-plaster to hide the wound; it relieves symptoms but not the disease. The intention here seems to be to:
Deal with past debt rather than future bills – forgiving historic arrears doesn’t reduce the astronomical £1,755 annual bills people face; and
Avoid tackling corporate profits or energy prices directly – MPs have called for using network companies’ windfall profits, but the regulator and government are reluctant.
Real relief comes from:
Energy efficiency improvements (insulation, better heating systems, smart meters)
Regulatory reforms that limit the cost burden on vulnerable households
Genuine reductions in wholesale or retail energy costs
but none of those measures are forthcoming.
This is a chance for Starmer to say he’s doing something.
But it doesn’t mean he’s doing the right thing.
The right thing is to cut fossil fuels out of UK energy consumption – starting with gas. We have no expected date for this to happen.
The right thing is to cut private profit out of energy provision by taking the greedy private energy companies back into public ownership. The government has no intention of doing that.
The right thing is to put the best interests of the people of the UK ahead of the profits of private shareholders. Keir Starmer is deaf to such pleas.
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