EXCLUSIVE: Energy Secretary Miatta Fahnbulleh said she is ‘absolutely alive to the fact that people are under pressure’ after Ofgem announced the energy price cap is rising by 4% in October
The Energy Secretary has admitted the public are right to be “impatient” over further rises to energy bills.
Miatta Fahnbulleh said she is “absolutely alive to the fact that people are under pressure” after Ofgem announced the energy price cap is rising by 4% in October.
It means energy bills will rise to the highest level in three years for millions of households this winter. From October, the typical household that pays by direct debit will see their annual bill increase from £1,663 to £1,723 – a £60 increase.
Speaking to the Mirror at a high-street energy support hub, the newly appointed Cabinet minister admitted that global shocks – such as the war in Ukraine and conflict in Iran – were “frustrating” as the Government tries to bring down bills.
Ms Fahnbulleh signalled that she is looking at short-term measures to protect people this winter but that long-term work was needed to insulate the UK market from international instability.
She said: “The public are right to be impatient. They’ve had a decade and a half where they’ve been let down, a decade and a half where the cost of living was biting and not enough was done.
“We are really clear that we will do what we need to in order to support people and protect them from price rises that are caused by the war in the Middle East.”
Ms Fahnbulleh reiterated Labour’s drive to transition to renewables, adding: “We’ve got to set us up for the long term… Decoupling us from gas and global fossil fuel markets. Clean power, absolutely critical, but it’s also reforming the market so that it ultimately works for consumers.”
Ms Fahnbulleh met with customers at a Utilita hub in Luton, where people can receive advice on bills, energy usage and debt help. She said meeting people struggling with the cost of energy is what “drives it home”.
“When you just go and you speak to people, you can be under no doubt the impact that energy has on people, and the sort of anxiety, the concern, the nervousness that comes with it,” she said after the session.
“For me, all it does is make me more determined to do what we need to do in government, and that is making sure that we can drive down bills because it’s far too important.”
She said her number one priority in the job is “affordability”, adding that energy is “an essential good and not something that’s a luxury.”
Most of the increase in the price cap is driven by higher gas costs following continued uncertainty around the Iran war, with gas bills set to rise by 8%. During the conflict, Tehran effectively blockaded the Strait of Hormuz, a vital shipping route used to transport around a fifth of the world’s oil and gas.
The latest price cap increase comes despite Andy Burnham announcing a temporary 20% VAT cut on electricity bills from October. Ofgem said without the cut, annual energy bills would have been £45 higher. It also follows a £150 cut to energy bills introduced by Rachel Reeves.
Meanwhile, experts at Cornwall Insight warned October’s rise in the energy price cap will likely be followed by a forecasted 9% increase in January. This would take the cap up another £149 to £1,872.
Mr Burnham on Wednesday said the rising energy price cap is “difficult for people, and I recognise that”, adding the Government would look at measures to bring down costs.
Speaking to reporters from a supermarket in London, the Prime Minister said: “It’s difficult for people and I recognise that. But it’s why, within days of taking office, I announced that we would remove VAT off electricity bills to give people that little bit of help. That kicks in from October.
“We know the price cap will have an impact, but it is what we can do right now. And we’ll continue to look as we go forward at how we get energy prices down in the long term, and that’s what we need to do too.”
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, said: “The Energy Secretary is right that households need more help. Volatile gas prices are driving the next increase in energy bills and these are set by what global markets determine.
“The Government has made a start by cutting VAT on electricity and extending the warm home discount last year, but ministers must go further and faster. That means funding a proper energy debt relief scheme before winter and getting insulation and heat pumps into the homes that need them most.”