The Government must strengthen its response to future energy price spikes as British households struggle with some of the highest electricity bills in the world, a new report has warned.
Parliament’s spending watchdog, the Public Accounts Committee (PAC), has urged the Department for Energy Security and Net Zero (DESNZ) to provide better support for vulnerable households facing fuel poverty. The committee also called for a clear timeline for policy decisions that could help bring energy costs down.
Britons face record energy debt
According to the PAC’s report, Britain had the highest electricity bills among 25 comparable countries in 2023. Consumers are now collectively £3.7 billion in debt for gas and electricity in 2024 – more than double the amount in 2021.
Sir Geoffrey Clifton-Brown, chairman of the committee, stressed the need for a more targeted and efficient system of support.
“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 bill-payers’ finances to an alarming degree.”
Failures in government support
The committee criticised DESNZ for being slow to learn from past energy price spikes, arguing that it still lacks the ability to deliver aid where it is most needed.
It pointed out that some households that did not require financial support still received assistance from the Government’s £44 billion energy bill support schemes, while many vulnerable families continued to struggle.
The PAC urged the Government to introduce additional financial support in time for next winter and accused both DESNZ and the energy regulator Ofgem of failing to do enough to help those falling into debt.
The report stated:
“We remain concerned that even after the crisis has subsided, UK electricity bills are the highest of the countries providing comparable data to the International Energy Association.
“The UK had the highest electricity price out of 25 countries reporting both domestic and industrial electricity prices in 2023, (including taxes and levies) and electricity is currently four times more expensive than gas.”
Policy delays and rising costs
The committee also criticised the Government for failing to act on long-promised reforms to energy pricing.
- Despite repeated pledges, DESNZ has not yet rebalanced energy costs, which would involve shifting environmental levies away from electricity bills and onto gas.
- The Government has been reviewing how household electricity prices are set for the past three years, with no clear timeline for when changes will be implemented.
- These delays mean that British consumers continue to pay some of the highest energy bills in the world, without any relief in sight.
The PAC also stressed that the Government must reassure Parliament that it has a robust plan for maintaining energy security amid increasing global tensions.
Ofgem urges households to seek help
A spokesperson for Ofgem acknowledged the challenges faced by many households and encouraged consumers to seek advice if they were struggling with energy bills.
“We know the cost of energy is a huge challenge for many households. If anyone is worried about paying their bills, we urge them to contact their supplier or groups like Citizens Advice to make sure they’re getting all the help they can.
“Switching or fixing tariffs now, where possible, could also help consumers to bring costs down.”
The regulator highlighted measures already in place to support struggling households, including:
- Tougher rules requiring energy suppliers to identify and assist customers facing financial difficulties.
- Affordable repayment plans and emergency credit to reduce the risk of self-disconnection.
- Making pre-payment meters the cheapest way to pay for energy.
- A proposed scheme to directly assist households with unmanageable levels of debt.
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However, Ofgem admitted that solving the debt crisis would require action from both the Government and the energy sector.
Government defends energy strategy
A spokesperson for the Department for Energy Security and Net Zero defended the Government’s approach, arguing that the transition to clean energy is the best long-term solution to rising costs.
“Our mission for clean power is the only way to protect UK billpayers from future price shocks.
“The 2022-23 energy crisis, which saw sky-high energy bills and put pressure on households and businesses across the country, was a product of our reliance on gas for heating and powering our homes. We will bring down bills for good by moving towards a clean, homegrown power system that we control.”
The department also outlined several initiatives aimed at reducing energy costs and supporting consumers:
- Plans to expand the Warm Home Discount, which would provide assistance to almost three million more households next winter.
- £1.8 billion allocated to improve home insulation and energy efficiency across England.
A long road to lower bills
While the Government insists that its long-term strategy will lead to cheaper energy bills, critics argue that immediate action is needed to protect households from rising debt and fuel poverty.
With Britons facing the highest electricity bills in the world, calls for urgent and targeted Government intervention are growing louder. Whether policymakers can rise to the challenge remains to be seen.
