The Tories must rapidly get their act together to prevent a fuel bill catastrophe for many households in April, it has been warned.
Unless something is done, millions are expected to be clobbered with what insiders predict will be a rise of over £700 in the price of gas and electricity.
Consumer champion Martin Lewis has become the latest big hitter to pile pressure on ministers to protect people from the potentially devastating hike.
It comes amid what is already being labelled a cost of living emergency. Mr Lewis, of Money Saving Expert, said: “The energy price crisis needs substantial intervention from the Government.
“We are going to see a minimum 50% increase in energy prices in the system and that is unsustainable for many.
“We need to look at what we can do now and how we can protect those people who will need to choose between heating and eating. There are already some who are having to make that choice.”
Business Secretary Kwasi Kwarteng is due to resume talks with energy bosses tomorrow.
An announcement on the energy price cap, which controls how much suppliers can charge the 15 million households on standard tariff and prepayment meters, is due to be made on February 7.
It is set to pave the way for the hike in bills in April. Ofgem, which sets the cap, argues it is needed to help suppliers recoup a surge in wholesale costs.
Some experts forecast the annual standard tariff cap, currently at £1,277, will rocket to around £2,000 in spring.
Energy consultant Cornwall Insights predicts it will rise to £1,865, but that it could then spike to £2,240 by October when it is reviewed ahead of winter.
Mr Lewis said the rise in bills in April is set to be “astronomical”.
He added: “The Government has been meeting the energy industry but they’ve not been meeting the consumer groups.
“They have to sort this now because if we leave this before it’s too late it will be a disaster.”
Ofgem has proposed measures that could shave about £65 off April’s expected price hike. Labour has called for the 5% rate of VAT on energy to be dropped.
A letter signed by 20 Tory MPs and peers has urged the Prime Minister to axe the VAT and to stop green levies that amount to a quarter of energy bills.
Former Tory pensions minister Baroness Altmann said: “There are so many elderly people already struggling with their energy bills. This could endanger their lives – it’s an emergency.
“[A] temporary reprieve, ideally on the VAT side, is really important.”
Nearly 30 energy firms went bust last year, leading to many households getting bigger bills as the deals they had been on did not continue when they were moved to another supplier.
Inflation is at a near decade-high of 5.1% and is expected to reach 6% by spring. Dearer prices along with tax rises have prompted experts to predict 2022 will be the “year of the squeeze”.
Shop price inflation nearly trebled last month, figures out today reveal.
The average price of goods rose 0.8% in December, from 0.3% in November, the highest increase since 2019, the British Retail Consortium said.
Prices will keep rising as retailers can no longer hold off passing on higher costs, industry leaders warn.
No10 said: “Protecting consumers is our top priority which is why our energy price cap will remain in place. We are also supporting vulnerable and low-income households further through initiatives such as the £500million household support fund, warm home discount, winter fuel payments and cold weather payments.
“Domestic fuels such as gas and electricity are also already subject to the reduced rate of 5% of VAT.”
