There is “worryingly high” consumer energy debt in the U.K., and more attention must be paid to supporting those at greater risk of fuel poverty says a report from MP’s out this morning
The Public Accounts Committee said that even after the energy price crisis subsided, the UK had in 2023 the highest electricity bills of countries providing comparable data.
Millions of people are living in cold conditions during the winter and are cutting back on essential costs such as food, with consumer energy debt at a worrying high. In 2024, over £3.7bn was owed for both domestic electricity and gas, compared with £1.8bn in 2021. Electricity is currently four times more expensive than gas.
The report warns that, in the event of a price spike similar to the one during the energy crisis, existing schemes to protect against fluctuations in international gas prices are not sufficient to shield households.
While the Department for Energy Security and Net Zero (DESNZ) deserves credit for the way in which it stood up past schemes, the PAC warns that not enough has been done to ensure effective support of vulnerable consumers should there be another price spike.
An estimated 238,000 households were pushed into fuel poverty by the crisis. The report finds that low take-up for the scheme supporting households without domestic electricity supplies suggests that it did not reach all those in need. Existing support schemes for the coming winter exclude certain people with disabilities, whose costs can be 25% higher than those without disabilities.
The largely universal nature of the £44bn schemes meant some people who did not need the support still received it. Yet despite it being almost three years since the energy price spike, DESNZ is still in the early stages of considering how to focus its schemes more effectively in the future, and would not yet be in a position to provide more targeted support to consumers and so reduce wasteful expenditure.
Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said:
“Sharp moves in energy prices in the future must find Government fully prepared to issue targeted and effective support, with those most in need the focus of that support. We cannot see a repetition of precious funds being beamed out across the spectrum to those who do not require help. This approach is all the more important when our report shows some households remain exposed, at a time when the UK’s electricity bills appear world-beatingly high and debt weighs down billpayers’ finances to an alarming degree.
“The Government should be commended for how swiftly it moved to shield billpayers from the depredations of volatile energy markets in recent years. It must now build on and learn from its efforts more quickly, as if past years have taught us anything, it is that volatility is the new normal. The geopolitical outlook remains uncertain, and energy demand is heating up at the same time as we pivot towards greater reliance on renewables. Our report poses unanswered questions as to how future energy security will be assured when the wind doesn’t blow and the sun doesn’t shine.”
