E.ON boss warns 40% of households are facing fuel poverty unless government intervenes – and says energy price cap could hit £2,800 by October as cost-of-living crisis grips UK
The boss of E.ON has said the energy cap could rise to as much as £2,800 and called for ‘substantial’ Government intervention to try and stop millions of people going into fuel poverty.
Michael Lewis, chief executive of the energy firm, said the ongoing increase in energy prices was ‘unprecedented’ and called for payments of Universal Credit and the Warm Homes Discount Scheme to be bumped up.
Egli ha detto 40 per cent of its eight million UK customers will be in fuel poverty in October if the Government doesn’t help, and suggested it tax ‘those with the broadest shoulders’ to achieve this.
It comes as millions of households struggle to keep up with rising bills, after energy regulator Ofgem raised the cap on how much suppliers can charge customers to £2,000 in April.
This is coupled with an ongoing cost-of-living crisis that has seen food and petrol prices rise, with Mr Lewis saying a third of E.ON’s customers were cutting back on food to afford energy bills.
E.ON CEO Michael Lewis, pictured here speaking to the BBC this morning, detto quello 40 per cent of his firm’s eight million UK customers will be in fuel poverty in October if the Government doesn’t help
Speaking to the BBC this morning, Mr Lewis said the rise in prices was ‘predominantly’ down the conflict in Ukraine, which is affecting supplies the eastern European country and Russia.
Egli ha detto: ‘In my 30 years in the energy industry I have never seen prices increase at this rate.
‘The gas price has gone up significantly, the gas price also drives up the electricity price because gas generation sets the price for electricity.
‘We are seeing a significant number of people in fuel poverty – that to say more than 10 per cent of their disposable income spent on energy.’
Egli ha detto 20 per cent of people were in fuel poverty and this could rise to 40 per cent without ‘very substantial’ government intervention.
He said models are predicting that two million customers supplied by E.ON will be in arrears by October.
'Francamente, some people are at the edge, they simply cannot pay and that will get worse once prices go up again in October,’ Mr Lewis said.
‘October will see a price increase and an increase in consumption, that’s when it’s going to hit and that’s why we’ve called for more Government intervention.’
He said it was ‘impossible to say’ what the new price cap will be in October, but added that predictions it could rise to £2,800 are in ‘the right ballpark’, and refused to rule out that it could reach £3,000.
He said increasing Universal Credit and increasing the amount available under the Warm Homes Discount Scheme would help people on the lowest incomes.
però, he added other help was needed and said the ‘scale of this is simply too big’ for the firm, which operates in 13 countries and made a profit of £6.6 billion last year, to handle.
‘We have a number of schemes we can help – the Warm Homes Discount Scheme, the eco-scheme where we can help with energy efficiency – and we try and identify those customers who are really struggling, and we have the E.ON Energy Fund where we can make direct payments to them,’ Mr Lewis said.
‘But the scale of this is simply too big for us to manage at the moment.
‘The scale of this is, as I said, unprecedented and that’s why we’re calling for more intervention from the Government.’
Mr Lewis added: ‘For us the most important thing is that the Government intervenes. It’s up to the Government to decide how they would fund that.
‘All I would say is that when they’re taxing to address this challenge, that they tax those with the broadest shoulders.’
The Government has faced calls to introduce a windfall tax on energy firms which have made massive profits and to direct the income from this into the pockets of struggling consumers.
Responding to Mr Lewis’s comments, Rachel Reeves MP, Labour’s Shadow Chancellor of the Exchequer, disse: ‘These comments underline how tough the cost-of-living crisis is for families, and how Conservative delays will see the situation get even worse.
‘The Government must act now, by bringing in a windfall tax on oil and gas producer profits to cut bills.’
The suggestion of a windfall tax has deeply divided Boris Johnson’s cabinet, with some members cautioning against the move despite it having widespread public support.
Il cancelliere Rishi Sunak (nella foto) has come under pressure to introduce a windfall tax on oil and gas firms to help people struggling with high energy bills
Chancellor Rishi Sunak has not ruled out introducing a tax, saying that businesses must show the scale of their investment in UK domestic fuel security.
He is is examining plans for a ‘Windfall Tax Lite’ to appease Tory opponents of a one-off hit on oil and gas firms.
Under current plans being drawn up by Treasury officials, the tax bill would be lowered for companies investing a high proportion of their profits back into the British economy to increase the UK’s domestic energy supplies and reduce our dependence on other countries.
Both Mr Sunak and Boris Johnson are understood to be privately open-minded about the idea of a windfall tax, despite resistance within the Cabinet, on the backbenches and among senior Downing Street advisers.
Some Tory MPs have been privately advised by party managers not to go onto social media to criticise a windfall tax ‘because a U-turn is in the offing’.