The energy price cap is expected to increase even further in October, with a charity warning that the hike will plunge households into a “deep, deep crisis”.

Ofgem chief Jonathan Brearley told MPs on Tuesday that the regulator is expecting the energy price cap to be “in the region of £2,800” by October - an increase of £830.

Brearley pinned the move on “once-in-a-generation” fuel price changes “not seen since the oil crisis of the 1970s”.

Energy bills pushed inflation - a measure of the cost of living - to 9 percent in April, and Mr Brearley’s remarks immediately led to calls for the Government to do more to help households cope with the deepening cost-of-living crisis.

Reacting this afternoon, Plaid Cymru MP Ben Lake, who is chair of the All Party Parliamentary Group on fuel poverty, said: "Rising energy bills will plunge more into poverty and risk stoking a wider social crisis.

"The Chancellor can no longer justify sitting on his hands while millions face destitution.

"We need an emergency Budget."

Earlier this week Mr Lake argued for measures including a discounted energy tariff for vulnerable households, and an expansion to schemes like the Discretionary Assistance Fund.

Welsh Liberal Democrats leader Jane Dodds said: "So many people within Mid and West Wales, and across the whole of Wales won't even be near able to meet these price rises.

"The Conservatives must act now or risk fuel poverty running even more out of control than it is currently."

 

 

According to the latest stats, around 200,000 of Welsh households - 14 percent - were living in fuel poverty by October 2021, meaning that they could not afford to keep their homes warm.

A further 153,000 were at risk.

Conversely, oil company Shell recorded its highest ever quarterly profits earlier this month.

The fuel giant made £7.3billion in the first three months of 2022, nearly triple the £3.1bn it made during the same period last year.

Adam Scorer, chief executive of National Energy Action, said: “Ofgem’s warning that the price cap will rise again by over £800 in October will strike terror into the hearts of millions of people already unable to heat and power their homes.

“It will plunge households into deep, deep crisis. The financial, social and health impacts are unthinkable.

“The UK Government simply must act and use the welfare system and schemes such as Warm Homes Discount to get significant financial support to people before winter.

"The ambition should be to find ways of covering the entire price increase for people on the lowest incomes.”

The Resolution Foundation said almost 10 million households could find themselves in “fuel stress” this winter if Ofgem’s prediction comes true.

The economic think tank’s analysis suggests the number of families living in fuel stress – defined as spending at least a tenth of their total budgets on energy bills alone – will rise from five million to 9.6 million.

Jonny Marshall, senior economist at the Resolution Foundation, said: “The sheer scale and depth of Britain’s cost-of-living crisis means the Government must urgently provide significant additional support.

“The fact that the crisis is so heavily concentrated on low- and middle-income households means it’s clear how the Government should target policy support.”

Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “This news will be utterly devastating for the 6.1 million homes currently in fuel poverty and for the additional 1.7 million households who will now spend this winter struggling to keep themselves warm.

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“Fuel poverty becomes a public health emergency in winter and the hidden cost of the UK Government’s continued inaction will be felt in a collapse in the mental health of those in fuel poverty, increased pressure on the NHS from those with health conditions affected by damp properties and excess winter deaths caused by cold homes.

“Unless the Government acts now, it will have blood on its hands this winter.”

Ofgem’s prediction is a further 42% hike on April’s price cap increase of 54%, or an increase of £693 a year to £1,971 for those on default tariffs paying by direct debit for the average household.

Chief exec Mr Brearley said future scenarios could include even higher energy bills if the Russian invasion of Ukraine and the political fallout further disrupts gas supplies.

He said: “The price changes we have seen in the gas market are genuinely a once-in-a-generation event not seen since the oil crisis of the 1970s.

“In any conceivable circumstances, there would have been supplier failure.

“However, it is clear to me and it is clear to the current Ofgem board that, looking over all of our institution’s history, had financial controls been in place sooner we’d have likely seen fewer suppliers exit the market, and for that on behalf of Ofgem and its board I would like to apologise.”

Mr Brearley’s comments followed former Ofgem chief executive Dermot Nolan telling the committee that the regulator could have stopped some of the sector’s failures “if we had moved faster”.

Additional reporting: Rebecca Wilks

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