UK consumer energy debt already at record levels – survey

A gas cooker is seen in Boroughbridge, northern England November 13, 2012. Reuters/Nigel Roddis/

By Reuters

British consumer energy debt is already at an all-time high, a survey showed on Wednesday, with six million households owing an average of 206 pounds ($249) to providers, before bills leap in October and again in January.

Energy bills rose by 54% in April and consumer website Uswitch said energy debt was already at an all-time high, with 1.3 billion pounds owed to providers, nearly three times higher than it was in September last year.

Almost a quarter of households owe 206 pounds, a sum that has risen by 10% in just four months.

The debt has accrued at a time when households should normally be building up credit on their accounts to help cover the more costly winter period. Uswitch said 8 million households now have no credit balance at all.

Britain is bracing for an 82% rise in energy bills in October, with charities warning that millions of people could be forced into poverty if the government does not launch a multi-billion pound support package to soften the blow.

The figures show the scale of the challenge facing the two candidates vying to become Britain’s next prime minister on Sept. 5, a process that has hampered any political response to the looming crisis.

Foreign Secretary Liz Truss and former finance minister Rishi Sunak have come under pressure in recent days to set out how they would support people through the year ahead, with frontrunner Truss causing consternation by insisting that tax cuts would be enough to help families.

Minister James Cleverley said on Wednesday that the government would haul in the leaders of the energy companies to “hold them to account” for the profits they were making, and said a windfall tax on energy producers was being kept under review.

“The energy cost implications have changed and, of course, as a responsible government, we constantly need to review the situation,” Cleverley, a supporter of Truss, said.

The government introduced a 25% windfall tax on oil and gas producers’ profits in May, which helped to fund a package of support for households. Since then, wholesale gas prices have more than doubled.