What Jeremy Hunt’s U-turn on energy bills support means for you

theguardian.com:

Jeremy Hunt has confirmed a widely trailed U-turn on his plan announced last autumn to make the government’s energy support for households less generous. The Treasury has subsidised gas and electricity bills for every household through the energy price guarantee (EPG) since last October. On Wednesday morning the Treasury revealed that support will continue at its current level for another three months. So what might that decision mean for you?

That’s right. Hunt’s widely anticipated U-turn means that typical bills will not increase by 20% next month, as had originally been planned. The EPG currently limits average annual costs to £2,500 but it was due to become less generous.

Under the original plan, that £2,500 ceiling was going to be upped to £3,000 a year from 1 April. But the chancellor has confirmed it will now stay at £2,500 a year until the end of June.

Charities, campaigners and others had urged the government not to reduce the financial help given to households with paying their energy bills, arguing it would push more Britons into poverty. There had been claims that, without intervention, the number of fuel-poor households would increase from 6.7 million to 8.4 million from April.

Campaigners had demanded that the £2,500 ceiling on the average dual bill be kept in place until the end of June, by which time sharp falls in wholesale gas prices are expected to have fed through the system and should benefit consumers.

Ofgem operates an energy price cap that sets market prices but the EPG keeps bills lower by paying suppliers the difference between that level and the £2,500 ceiling.

Analysts have predicted that the Ofgem cap will fall to just above £2,100 a year from 1 July until the end of this year. It’s a lot higher