Energy supplier calls for bill freeze and VAT cuts to ease winter crisis | Business newsletter

One of the UK’s biggest energy suppliers says the government should introduce energy subsidies, cut VAT on fuel bills and roll back a price freeze funded by a a £100 billion commercial loan scheme to prevent millions of households from being pushed into fuel poverty this winter.

The EDF said a new government support package should be accompanied by an aggressive plan to cut consumer demand.

More than seven million homes in the UK do not have loft insulation and eight million homes do not have recessed wall insulation.

The call comes as consumers prepare for an increase in the domestic energy price cap from £1,600 to more than £3,500, which is expected to be announced by Ofgem on Friday.

The price increase was driven by a dramatic increase in wholesale gas prices, in large part due to Russia restricting supplies to Europe after invading Ukraine.

The French-owned EDF supports an industry-wide scheme, first proposed by Scottish Power, that would see domestic prices freeze for up to two years, with suppliers able to borrow funds from commercial lending institutions to make the difference between a customer’s bill and the cost of purchasing energy in the wholesale market.

The loan, estimated to be up to £100 billion, will be repaid from all bill payers over a decade or more once prices drop.

To buy time while the loan scheme is set up, EDF wants to finance £400 for all customers, announced in May by Chancellor Rishi Sunak, to be paid in three months instead of the initial six, an increase Double customer support at no cost.

Philippe Commaret, EDF’s managing director of clients, told Sky News: “The price cap increase means more than half of our UK households will fall into poverty in January.

“That means more than 10% of their disposable income will have to go towards paying their energy bills.

“In other words, their energy bills in the first quarter of 2023 will be higher than they used to pay for the whole year in 2021.

“This is a crisis, and we could see the early signs of that.

“We’ve seen a 30% increase in calls from people who are having a hard time paying their bills.

“We need to find a solution, first of all to step up as an energy supplier but also because of the scale of the crisis, which requires more support from the government.

“First look at the tax issue. It is quite paradoxical that the higher the energy bill, the higher the revenue, so the government has to equalize the revenue.

“The second is to review the level of the customer support package, beyond the £400 level announced in May.

“One way to buy time is to pull out £400 for the next quarter to buy time to find a solution for January.

“The other solution is a private initiative to create a deficit fund, where we freeze the bill and the difference between expenses [of the energy] and what we can bill customers funded by private organizations. “

EDF has launched a program to help its clients, with 100,000 of those most in need being contacted directly with ideas to reduce need and information about current financial assistance. yes.

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Government sources said the deficit plan had been put forward by energy companies during meetings with ministers, but any decision would be left to the next prime minister.

Liz Truss has promised to suspend only around £150 of the green tax while Mr Sunak has said he will cut VAT on bills.

Labor leader Sir Keir Starmer said he would freeze bills at the current price ceiling, with costs fully financed by Exchequer through closing the loophole in income tax, and projected savings. triggered by reducing inflation.