UK suppliers expect government U-turn on planned cut to energy bill support
Britain’s energy suppliers are expecting the government to U-turn on a planned cut to energy support for households – but have been told by officials to prepare two sets of bills for next month.
Chancellor Jeremy Hunt is under pressure to extend the energy price guarantee, a government policy which aims to limit annual household bills to £2,500 until the end of March.
Hunt, who is due to deliver the budget on 15 March, plans to make the guarantee less generous from April, raising it to £3,000. One-off support of £400 which was available last year will also end in April.
Energy suppliers have been contacted by government officials with two sets of rates for units of gas and electricity – depending on whether Hunt decides to extend the support.
One energy chief executive said: “We have effectively loaded two sets of rates into our systems to test the billing and make sure the direct debits are correctly calculated. We’ve been told everything is leaning toward [remaining at] £2,500.”
Treasury sources confirmed that suppliers had been asked to prepare for either decision.
Suppliers are expected to give customers a month’s notice before changing their tariff, meaning if Hunt waits until the budget to make a decision it could have caused problems.
However, industry sources said the regulator, Ofgem, has “given us some leeway on dates”.
“If a decision doesn’t come until mid-March, that will be a challenge but the dates are not hard and fast and we understand the regulator would allow that.”
Pressure has been mounting on Hunt to reverse the planned cut to support since wholesale gas prices began falling sharply earlier this year. An increase in gas prices linked to the war in Ukraine pushed up bills last year, forcing the government to
Read more on theguardian.com
