Taxpayers face £16bn energy price cap bill
Expensive bid to limit shock of cost rises
THE scheme to limit energy price hikes will set taxpayers back £16billion, experts say.
Ofgem yesterday announced its price cap will soar to an average £4,279 a year in January.
The Government’s energy price guarantee means a typical household will pay £2,500 a year until April, when it hits £3,000.
But think-tank the Resolution Foundation says this will equate to a £16billion bill for taxpayers between January and March alone. Energy expert Cornwall Insight puts the figure at £42billion over 18 months.
The price cap affects those on standard variable tariffs, rather than fixed rate deals. Another cap applies to those with prepayment meters.
Which? director of policy and advocacy Rocio Concha said: “The news that the energy price cap will hit £4,279 from January will be hugely worrying.
“But consumers should remember their bills are protected against this increase by the energy price guarantee scheme.” Which? is also concerned that hundreds of thousands of customers on prepayment meters have not yet claimed the £400 Energy Bills Support Scheme vouchers that are available.
Regulator Ofgem told customers there is “no immediate action” needed over yesterday’s price cap announcement.
Soaring gas prices are putting a huge strain on the public purse.
The bill to deal with the fallout of collapsed energy firm Bulb could hit £6.5billion.