A significant proportion of Britain’s most vulnerable households are to see their energy bills rise by an average amount of £57 per year. This particular rate increase applies to pre-payment meters, with five of the big six having already raised the tariffs on them to within just £1 of the government’s recent price cap amendment to £1,089. It is believed the sixth Big Six energy firm, SSE, will be following suit presently.
The five million households considered the most vulnerable include householders who have previously fallen behind with their payments, as well as many tenants living in rented accommodation.
Energy Caps Attract New Criticism Thanks to Big Six’s Price Hikes
The recent price caps implemented by the government have attracted plenty of criticism, particularly from the energy suppliers themselves. Now they are receiving additional criticism thanks to the actions of the big six energy firms who appear to be taking advantage of the poorest people in society by pricing so close to the cap that was intended to protect them.
While the likes of the Guardian newspaper have subtly referenced the reaction to the targeted energy price hike by noting that ‘some might call it cynical’, there is also something of a general apathy to the actions of the largest companies in the UK energy market (British Gas, EDF Energy, E.ON UK, npower, Scottish Power, and SSE). Many commentators are aiming their ire at the price caps themselves, with notable criticisms pointing out that there are multiple factors to be considered when attempting to protect the most vulnerable members of society, and that price caps simply do not take these additional factors into consideration.
Protecting the Poor Requires Multi-Pronged Solution
Energy efficiency in the domestic sector is an area that still needs to be improved, with ideas including schemes that help and educate households on how to cut their own individual energy costs. Additionally, cheaper energy production options such as onshore wind farms will likely need to be incorporated in order to reduce the long term costs of mass energy production.
The likes of price freezes can certainly help in the short term, but price caps leave the door open for the larger energy firms to manipulate exactly where the ceiling is. With a price freeze, the rates people and businesses pay don’t change at all for the period of time set out in the freeze conditions. A price cap however will be revisited every six months and adjusted according to the costs facing the suppliers of the energy.
Smaller Energy Suppliers Offer Alternative Solutions
While the big six will no doubt continue to monopolise the UK’s energy market for the foreseeable future, there is encouragement for customers in the form of many newer and smaller energy suppliers with alternative pricing strategies. There are several who utilise greener energy production, as well as an increasingly attractive range of tariffs which can benefit households and businesses alike.
The Chief Executive of Ofgem, Dermot Nolan, said, “Ofgem is working with the Government to protect all customers on poor value default deals, such as standard variable tariffs, from being charged too much for their energy as soon as possible.
“Our aim is to protect those who do not switch, while making it easier for those who do to get a better deal.”
If you want to learn more about the different energy supplier options and tariffs available for your business, get in touch with Business Save’s team of highly experienced energy experts.