Grant Shapps warns that energy companies should not raise bills for customers who are cutting their use
Business secretary Grant Shapps has written to energy suppliers to warn them not overcharge customers making “huge efforts” to cut their usage.
The cabinet minister said he was “disturbed” at reports that some customers had seen a huge spike in direct debit charges despite cutting back on the amount of gas and electricity.
As hard-pressed families struggle with paying bills during the cost of living crisis, Mr Shapps asked the utility giants for transparency in pricing.
Sharing a letter sent to energy bosses on Twitter, the business secretary said: “Households shouldn’t see their direct debits rise when their energy use falls.”
Mr Shapps said he concerned that some consumers “are saying their direct debits are going up when they are making huge efforts to reduce their usage to save money at a time when household incomes are squeezed”.
Urging firms to be “responsive” to changes made by customers, he added: “I am interested to understand how you intend to ensure that your direct debit system does not over-estimate charging.”
Britain’s energy suppliers have agreed to abide by the government’s energy price guarantee, which limits the amount that can be charged per unit of gas or electricity.
Paying by direct debit is limited to 34.0p/kWh for electricity, and 10.3p/kWh for gas, which should should mean the average annual household energy costs should be limited to £2,500, until further changes are made in April 2023.
But The Times reported last week that some customers have seen direct debts going up by hundreds of pounds a month, even if they are on fixed-tariff energy deals in which unit prices haven’t changed.
Regulator Ofgem has been asked to examine the issue so billing is “more responsive”, having found in the summer that some customers had been asked to pay for a level of gas and electricity they were unlikely to use.
This comes as major suppliers reported that customers have reduced their energy consumption by more than 10%, and the government is preparing to launch an energy efficiency public information campaign.
Michael Lewis, chief executive at E.ON, stated the following: The Guardian it was “seeing reductions of 10 to 15 per cent” over recent weeks, while Utility Warehouse owner Telecom Plus said gas usage had declined 10 per cent in recent months.
Energy bills are set to soar again next spring after the chancellor Jeremy Hunt said the energy price guarantee would rise on 1 April – pushing up average annual costs from £2,500 to £3,000.
Over one million young families in England will be in fuel poverty by spring, according to End Fuel Poverty Coalition figures shared with The Independent.
According to the estimates of the coalition, families with children below five will see an increase in fuel poverty from 860,000 up to 1,050,000 by April when changes are made.