Campaigners have called for greater immediate support with energy costs as Ofgem’s price cap rises by 13 per cent for July to September.
Families “can’t wait until the autumn” for targeted help, experts have warned, with the energy price cap hitting its highest level in two-and-a-half years on Wednesday.
The £221 increase was triggered by a spike in oil prices in March following US attacks on Iran. The Middle Eastern nation’s subsequent occupation of the Strait of Hormuz – a crucial waterway for the oil trade – has seen energy costs rise around the globe in response.
This sudden rise has begun to wane slightly with peace talks ongoing. The price of crude oil now sits at around $68 (£51) a barrel, down from a high of $112 (£84) in April. However, it remains far above the $59 (£44) seen at the start of the year.
The reduction is also not reflected in the new price cap, which is set around five weeks before coming into effect, resulting in a ‘lag’ effect.
The Trades Union Congress (TUC) has called on the government to introduce a social tariff which would cut bills for up to two-thirds of households on a means-tested basis.
TUC general secretary, Paul Nowak, said: “Today’s change in the energy price cap is a clear example of how Trump’s warmongering is hitting British families – from today, households will start to feel the pain of rising bills. And bills were already far higher than they were five years ago.”
The group has said its proposals would support 8.7 million households, cutting bills by up to £559 for the most vulnerable. The majority of other households would remain attached the the price cap level, while the “extremely wealthy minority with huge estates,” would be asked to pay more.
Funded by a windfall tax on banks, the TUC says the plans would cost £3.4 to £5.9bn a year.
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In April, Rachel Reeves said the government was looking at targeted support for energy bills. The chancellor said this would be means-tested and likely come in the autumn, but was not drawn on giving further details.
It comes after energy costs for all households were reduced by an average £117 from April by scrapping two energy efficiency schemes funded through bills.
The £221 rise virtually cancels out this intervention, but does mean bills are still lower than they would have been without the measure.
Commenting on Wednesday’s rise, Conor O’Shea, coordinator of the Cost of Living Action campaign, said: “Today’s energy price cap increase is another blow for households who simply cannot afford to pay more for the essentials.
“While the government is right to prioritise targeted support with energy bills, many families need that help now and cannot afford to wait until the autumn.”
The campaign group added the government must provide a response that addresses the “underlying causes” of the energy crisis, calling on it to nationalise elements of the distribution grid and introduce an essential energy guarantee that would ensure every household can always afford their costs.
Minister for energy consumers, Martin McCluskey, said: “We know families are deeply concerned about rising energy bills because of a war we did not choose, and we are determined to fight their corner to tackle energy affordability.
“The action we took at the Budget, which has taken an average £150 of costs off energy bills, is now factored into bills for the years to come.
“We have also expanded the warm home discount scheme, which benefited around six million households last winter and will remain in place for the rest of the decade.
“We will continue to monitor the situation ahead of the winter and plan for all contingencies, while doubling down on our mission for clean power to bring down bills for good.”