Britons struggling to afford to heat their homes and kept the lights on have accumulated more than £2bn in energy bill debts, the latest annual figures show.
Gas and electricity bill arrears rocketed by just over one third from £1.5bn last year to £2.1bn in the year to April 2022 – just before the spring price cap rise kicked in.
Liz Truss has promised to cap annual household energy bills at £2,500 for two years, after setting out a plan for the government to subsidise the big suppliers’ extra wholesale costs.
But the Debt Justice campaign group – who produced the analysis based on the latest data from Ofgem – said many were struggling to cope with already “astronomical” bills and rising living costs.
Calling for Ms Truss to “write off” existing energy debt, executive director Heidi Chow said: “The government cannot afford to ignore record levels of energy debt that will drive even more poverty and hardship for years to come.”
The Debt Justice campaigner added: “Liz Truss’ plans must include action to cap energy prices and write off energy debt to give everyone a fighting chance of keeping the lights on this winter.”
The energy price cap was raised by 54 per cent to £1,971 in April, pushing up energy costs over the summer and adding to the pressure on families struggling to cost with soaring inflation.
Though Ms Truss has vowed to cap October’s price rise until 2024 and maintain the £400 discount, annual energy bills will still rise 26 per cent when they are allowed to go up to £2,500 next month.
Debt Justice has joined Labour and the Lib Dems in calling on the government to freeze current energy prices and expand the windfall tax on the big energy producers – arguing that it could help the government write off debts.
Louisa, a 39-year-old from south London, said she was already paying back over £2,000 of gas debt. “At this rate it will take another four years to pay it off,” she said.
She said her family’s electricity costs had jumped from £40 a month to around £60 to £70 in recent months. “I’m having sleepless nights. My anxiety gets worse every time my bills are due as I fear I won’t be able to make ends meet.”
Louisa added: “A £100 grocery shop now only lasts us one week when it used to last two. Writing off this gas debt would make a real difference to my family this winter.”
Ms Truss has said she will not “give in” to opposition calls for a new windfall tax, with the estimated £100bn expected to be paid mostly through extra government borrowing.
No 10 has said it does not believe the 10-day mourning period for the Queen will have any impact on the policy, since officials will continue to work on the details and MPs are not required to pass legislation.
But chancellor Kwasi Kwarteng has only a narrow window to reveal the fiscal details of the package between Monday’s funeral and the beginning of conference recess on 22 September.
The prime minister’s official spokesman suggested a statement setting out the fiscal details would take place next week, telling reporters: “We are still planning to deliver a fiscal event this month.”
Passing legislation is not believed to be required to bring the new energy price guarantee into effect for households, although businesses are still facing a wait for details about the promise of “equivalent” support for a six-month period.
“There isn’t a date set for the business support element of the guarantee. Obviously we’re working that through. It hasn’t been impacted by the mourning period, as I understand,” the PM’s spokesman said.
Paul Johnson, director of the respected Institute for Fiscal Studies (IFS) think tank, said on Monday that it was “extraordinary” that the government did not publish how much it expected the energy price guarantee to cost at last week’s announcement.
Estimated that it could cost £150bn, he told “It’s extraordinary that they didn’t publish a cost with the announcement. This could actually turn out to be the biggest single fiscal announcement in my lifetime, because this could cost £150bn.”
He said he hoped some officials were already thinking about “something better for next winter”, adding: “This might be necessary this year, it’s incredibly expensive. It’s totally untargeted. It gives large amounts of money to people who don’t need it.”
