Ministers have committed to help households struggling with their gas and electricity bills this winter after energy industry bosses warned that consumer debt had climbed to more than £3bn.
With the government under fire for scrapping universal winter fuel payments to pensioners, ministers met energy industry bosses on Wednesday to discuss ways of supporting struggling households through the coming colder months.
Executives from 10 of the UK’s energy suppliers – including the boss of British Gas, Chris O’Shea – met the energy minister Miatta Fahnbulleh, alongside consumer groups, charities and the regulator, Ofgem.
The Guardian understands there was “broad agreement around the table” that urgent action was needed to help tackle a “worrying” rise in debts being racked up by consumers on their energy bills, which have reached a record high of £3.2bn in total.
In the short-term, the government is expected to consider demands for it to double the support offered to homes through the warm home discount, a scheme which hands £150 to billpayers in Great Britain who are in receipt of certain benefits during the winter months.
Ministers have also heard calls from industry leaders to ease the burden on lower-income households by scrapping green levies on energy bills and moving them instead to general taxation.
Energy companies and consumer groups are expected to help government officials to establish working groups which will thrash out detailed proposals next month before Rachel Reeves’ October budget.
In the longer term ministers are also expected to consider a discounted “social tariff” for gas and electricity to make energy bills more affordable to Britain’s most vulnerable households.
The UK’s largest energy suppliers were summoned to the meeting hours after Ofgem announced a 10% hike for energy bills last week to discuss “an ambitious set of commitments” to help households manage this winter.
From October the new price cap will raise the average household annual dual-fuel energy bill to £1,717 a year, up £149 from £1,568, the level that has been in place since July.
The government is facing criticism over the decision to cut winter fuel payments for 10 million wealthier pensioners, announced by Reeves last month to help plug a £22bn “hole” in the public finances she said was left by the previous Conservative government.
Before the meeting Fahnbulleh said it was essential for energy companies to play their part to “ensure that more households do not fall into debt, and that those already in arrears are adequately supported”.
She added: “We expect all energy suppliers to spread the message far and wide that anyone who is worried about their situation can always contact their supplier, and don’t have to suffer in silence. It is vital that consumers who are experiencing debt – or who are at risk of falling into debt – are given the support they need by their suppliers.”
Industry sources said that no concrete plans emerged from the meeting despite the “strong sense of political will” to tackle the problem of rising energy debt.
One said: “It was a very constructive meeting overall, and it was very clear that the ministers are committed to tackling the problem of rising energy debts. They recognise that this is not just an energy problem, it’s also part of the wider economic pressures facing households.”