British bill payers remain exposed to another energy crisis while facing “worryingly high” energy debts and some of the highest electricity costs in the world, parliament’s spending watchdog has warned.
The public accounts committee (PAC) said ministers had not put in place sufficient safeguards to shield households against another energy crisis or taken steps to permanently reduce Britain’s energy prices.
Instead, the MPs said, the government is relying on the roll-out of cheap renewable energy to bring down energy costs over time while existing energy bill support schemes stop short of helping the most vulnerable.
Geoffrey Clifton-Brown, the chair of the PAC, called on the government to take action to shield the most vulnerable from future energy price shocks while permanently lowering costs for all households.
“If past years have taught us anything, it is that volatility is the new normal,” Clifton-Brown said. “The geopolitical outlook remains uncertain, and energy demand is heating up at the same time as we pivot towards greater reliance on renewables.”
The government’s current schemes have not gone far enough to help low-income families or those with disabilities, the PAC report found, while government reviews into lowering bills by removing levies or encouraging energy use outside peak hours have stalled.
This has left millions of people struggling to pay off escalating debts while living in cold conditions and cutting back on essential costs such as food. The PAC warned that many people who are unable to pay their energy bill struggle to receive “good, accurate and helpful advice or support” from their energy supplier.
The findings lay bare the crisis in energy costs facing British households, which pay some of the highest electricity bills in the world, according to the International Energy Agency.
Households face a 6.4% hike on their monthly gas and electricity payments from next week after the industry regulator lifted the cap on energy prices for a third consecutive quarter to an average of £1,849 a year for the average household.
The typical household energy bill is now about £600 a year higher than before Russia’s invasion of Ukraine three years ago. The conflict caused household energy bills to triple, which pushed an estimated 238,000 households into fuel poverty and caused energy debts to climb to £3.7bn last year from £1.8bn in 2021, according to the PAC.
Clifton-Brown said a repeat of the energy crisis should find the government “fully prepared” to deliver “targeted and effective support, with those most in need the focus of that support”, he said, because the government would not be able to afford a repeat of the £44bn bailout offered to all households at the height of the energy crisis.
The government scheme handed a £400 discount to all consumers in England, Scotland and Wales with an electricity connection via their energy suppliers to help households to keep up with the rocketing cost of energy. Although the universal scheme provided swift relief to vulnerable households it was later criticised for handing billions in public money to wealthy consumers who did not need the help.
“We cannot see a repetition of precious funds being beamed out across the spectrum to those who do not require help,” Clifton-Brown said.
“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,” he added.
A spokesperson for the Department for Energy Security and Net Zero said the government’s goal to meet 95% of the UK’s power needs from carbon-free energy sources would “bring energy bills down for good” and was “the only way to protect UK bill payers from future price shocks”.
“We are also rolling out support for consumers, including through proposals to expand the warm home discount to almost 3 million more households next winter, and allocating £1.8bn of funding to create warmer, more energy-efficient homes across England,” the spokesperson said.