Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Energy bills: Customers can't carry cost of Ukraine war, boss says

Energy bills: Customers can't carry cost of Ukraine war, boss says

UK households cannot carry the cost of the Ukraine war which is set to push energy bills even higher, the boss of Octopus Energy has said.

Greg Jackson was speaking as UK households brace for average energy bills to reach a predicted £3,554 a year in October and £4,650 in January.

He called for the government to double its financial support or freeze the amount suppliers can charge for energy.

No 10 previously said there would be no new policy before a new PM is in place.

The new Conservative Party leader will be announced on 5 September and will face immediate pressure to tackle the nation's energy bills.

The current favourite, Liz Truss, has promised tax cuts and recently hinted at direct financial help for hard-pressed households.

Her rival, Rishi Sunak, has said he would introduce more targeted support for households, and has promised to reduce VAT on domestic energy bills from 5% to zero.

The upcoming jump in energy prices has prompted investment bank Citi to raise his forecast of UK inflation to 18% in early 2023.

Inflation - the rate at which prices rise - is currently at 10.1% and the Bank of England's target is 2%.

On Friday, the energy price cap - the maximum amount suppliers can charge customers in England, Scotland and Wales for each unit of energy - will be announced.

Energy prices have risen sharply because demand for gas increased when Covid restrictions eased while the war in Ukraine has disrupted supplies from Russia.

Mr Jackson, founder and chief executive of Octopus Energy Group, said: "You can't expect the energy customers, or indeed the retailers to carry the cost of a war."

Asked what the solution could be, he told BBC Radio 4's Today programme the government "could double the existing support package".

In October, all UK households will get a £400 discount on their fuel bills and some eight million low-income households will get an additional £650.

Plans to enable households to get discounts on electricity bills if they cut use at peak times are set to be announced by the National Grid in the next two weeks.


Mr Jackson also suggested a "tariff deficit fund" which would involve the government freezing the energy price cap roughly where it is.

The government would borrow money from banks to pay the difference between the wholesale cost and the price to the consumer while energy prices were high.

This money would be paid back when energy prices came down, he said.

Dale Vince, chief executive of renewable energy generator and supplier Ecotricity, told the BBC: "The government does need to intervene we shouldn't expect customers to pay the cost of this failure and the Ukraine war."

He said the problem pre-dated the invasion of Ukraine and there was a "systemic failure in the energy market".

But he said the deficit scheme Mr Jackson had outlined would force taxpayers to foot the bill over the next decade.

"The government simply needs to step in and pick up this cost like it did in the pandemic," he said.

"We need £40bn to get through this winter. That's 10% of what was spent during the pandemic and that's the only thing that will really sort this problem out."


This summer has seen forecasts, suggestions and a lot of political debate. What it has not seen is certainty.

On Friday, households will finally be told exactly by how much domestic energy bills will rise in October. Remember, individual bills will vary, depending on how much gas and electricity you use. But the percentage increase in the domestic energy price cap for England, Wales and Scotland will be official and expressed in clear terms.

Energy will be more expensive, but at least people will have some basis to plan for the financial hit.

That said, the uncertainty won't be over. What extra support, if any, that is provided by government won't be clear until a new prime minister is in place. Energy prices for the second half of the winter are also unclear.

Energy bosses say fundamental change in the sector doesn't come quickly, but help for householders facing soaring bills as the nights draw in cannot come quickly enough.

Meanwhile Bill Bullen, founder and chief executive of energy supplier Utilita,said that energy prices must be frozen at their current level.

"That's not going to be enough even still for those customers who are on low incomes and vulnerable, maybe have some medical dependencies so some extra help is going to be required," he said.

He added: "The reality is when you get up to £3,500 a huge number of homes won't be able to afford this."

Mr Vince said there needed to be an overhaul of how electricity prices were decided.

"The price of gas sets the price of electricity in our country and we should break that link - other European countries are looking to do exactly that," he said.

"We let global commodity markets set the price that we pay for gas from our own North Sea and we are paying up to 10 times more for that right now."

He added: "Half of the gas that Britain uses come from our North Sea if we price cap that we take away half the problem."

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
×