An energy minister has told the bosses of Great Britain's biggest energy suppliers to do more to help households pay off their unpaid energy bills this winter, before the government spends almost £2.5bn to help write off the country's record high debts. The minister for energy consumers, Polly Billington, summoned senior leaders from the largest six energy suppliers to a roundtable meeting on Thursday to discuss plans to pay down the energy debts of about 2.4m of the hardest-hit households. The debt relief scheme forms part of a wider strategy put forward by the chancellor in the annual budget statement last month to tackle household energy debt, which could reach £7bn by the end of the year.
At the meeting, attended also by representatives from Energy UK, the fuel poverty charity National Energy Action, and five consumer advice groups including Citizens Advice, Billington told suppliers they would still need to play a crucial role in tackling the longstanding issue of problem debt. Suppliers are expected to proactively identify customers who may be under financial strain and offer help such as debt payment plans or pointing them towards debt advice services. The government is also planning to work with the industry to modernise payment systems and make it easier to spot households needing extra help, backing the use of smart meters and smart pre-pay meters to help households track their spending and avoid getting into arrears.
The average household currently pays about £50 a year on their energy bill to service unpaid energy bills across the market, but the government believes this figure would likely rise without action to shrink the debt pile. Billington said in a statement after the meeting: "I know that energy debt weighs heavily on millions of families across the country. That affects all of us, with the costs passed on to other billpayers." The government believes that the one-off energy debt relief scheme, combined with new measures to keep debt from building up again in future, could save all households about £130 on average over the next 10 years.
About 40% of unpaid bills are understood to build up during the process of moving home. The government plans to tackle this with reforms including a new obligation on landlords to provide meter readings and moving dates to their supplier when a tenant moves in or out of a property. Gillian Cooper, the director of energy at Citizens Advice, said that with typical annual energy bills predicted to increase again in January it was essential that the government's initiative "not only tackles existing energy debt, but also includes protections to help prevent households from falling into it in the first place". Rachel Fletcher, a director at Octopus Energy, the country's biggest energy supplier, said she was pleased to see a focus on improving what suppliers do to prevent customers from falling into debt.