This autumn’s energy price hike will be too big for the industry to deal with and require a “massive shift” by the government to slice £1,000 off the bills of the poorest and most vulnerable, Keith Anderson has warned.
Giving evidence to the Business, Energy and Industrial Strategy (BEIS) committee today (19 April), the Scottish Power chief executive said his company had received 8,000 calls last week alone from customers worried about soaring energy bills.
He said there was “real anxiety” from a “lot of people who have never been in this situation before” but it was “too early” to assess the impact on debt levels.
“Come October, that’s going to be horrific. It’s got to a stage where I honestly believe the size and scale is beyond what I can deal with and what this industry can deal with. It requires a massive shift, a significant shift in government policy.
“Those people deemed to be in fuel poverty or vulnerable need something of a size and scale that puts bills back to where they used to be before the gas crisis.”
The bills of the poorest and most vulnerable should be cut by £1,000, which could then be paid back over a ten-year period by whole or part of the customer base, Anderson said.
He appeared at the committee alongside Michael Lewis, Eon UK chief executive, Centrica group chief executive Chris O’Shea and Simone Rossi, chief executive of EDF in the UK.
Lewis said this autumn, when the price cap is next reviewed, the proportion of households classed in fuel poverty looks set to rise to 30 to 40%.
If “nothing further” is done by the government, outstanding debt by customers to Eon is expected to increase 50% increase by the end of this year, he said: “This requires an unprecedented response from government.”
O’Shea told the committee that the number of Centrica’s customers who are behind on their bill payment has increased by 125,000 over the past year.
Rossi said that EDF UK’s 10% most vulnerable customers are typically spending one sixth of income on energy bills as opposed to one twelfth a year ago.
Over the last six months, he said EDF had experienced a 40% increase in calls by customers concerned about debt.
Backing his fellow chief executives’ call for further and rapid government intervention, Rossi said: “When the government intervened at the beginning of February, it was proportional at the time but ever since the situation has worsened. With war in Ukraine and turmoil in the market, we now see bills higher for longer. We would expect to see government reassess the situation as soon as possible.”