Martin Lewis has joined calls for the UK Government to ‘urgently postpone’ plans to raise energy prices in April, warning that any decision cannot wait until the Budget on March 15. In a letter to Chancellor Jeremy Hunt, the consumer champion said that 1.7 million more people could be pulled into financial hardship if he does not freeze prices in the spring.
The founder of MoneySavingExpert.com urged the Chancellor to keep the Energy Price Guarantee (EPG) at a typical £2,500 a year, rather than hiking it to £3,000 a year from April 1, 2023 as planned. He wrote that pushing back the looming 20 per cent hike would be both “practical and fair” and help people survive until bills begin to come down later in the year.
The letter states: “This cannot wait until the Budget - in practice, energy firms will need to know much sooner if the planned rise isn’t happening on 1 April, or they are bound to have to communicate to customers that it is coming.”
The financial journalist said that the decision to increase prices was made at a time when wholesale rates were looking to be far higher than they are now, and that the underlying price cap currently looked as though it could be cheaper later this year than even the current EPG rate of £2,500 a year for a typical household.
This gave the UK Government “significant headroom” to enable a postponement, while maintaining a lower EPG would also help reduce inflation.
He said: “Postponing the increase is a practical and fair decision, with household energy bills already double what they were the prior winter.
“Crucially, the damage to people’s pockets and mental health of another round of energy price rise letters is disproportionate.”
Martin also warned Jeremy Hunts that the charity National Energy Action (NEA) predicts that the number of fuel-poor households will rise from 6.7 million to 8.4 million from April - approaching double the 4.5 million households in this position in October 2021.
There’s also support from within the industry, with Energy UK backing Martin’s call on Thursday.
Emma Pinchbeck, the chief executive of Energy UK, which represents suppliers, told MPs that the industry too wanted to see the Energy Price Guarantee fixed to £2,500 for the rest of the year.
She said: “There’s an underspend on that programme against what was budgeted because gas prices have fallen.
“We’re also calling, like the consumer groups, for some kind of targeted support in addition to that, so we’re very up for conversations about things like social tariffs.
“And we’ve written to the Chancellor to call for the long-term picture on bills to be sorted by investing in green infrastructure but also in energy efficiency and doing some things on VAT to make things easier.”
So far, 21 charities and consumer organisations have supported the call to postpone the planned Energy Price Guarantee hike in April, following Martin Lewis’s letter to the Chancellor.
The supporters are:
- MoneySavingExpert
- Advice for Renters
- Advice UK
- Age UK
- Centre for Sustainable Energy
- Christians Against Poverty
- Citizens Advice
- Citizens Advice Scotland
- End Fuel Poverty Coalition
- Energy Action Scotland
- Epilepsy Action
- Fair By Design
- Fairer Housing
- Huntington’s Disease Association
- Money Advice Trust
- Money and Mental Health Policy Institute
- National Energy Action
- Scope
- South West London Law Centres
- StepChange
- Warm This Winter
You can read the letter in full on the MoneySavingExpert.com website here.
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