Michael Lewis, chief executive of E.ON UK, has warned MPs of the consequences of soaring energy costs once the industry regulator, Ofgem, raises the annual energy cap in October.
“We are expecting a severe impact on customers’ ability to pay,” he told MPs at the business, energy and industrial strategy select committee in parliament, adding that he expected debts of customers to rise by 50 per cent, or £800m.
The industry called for an “unprecedented” intervention by the government before October to reduce the burden of energy bills. ScottishPower's Keith Anderson proposed the introduction of a £1,000 deficit fund or social tariff for vulnerable customers. Other options discussed were removing VAT on gas and electricity, extending the warm homes discount, removing green levies on bills, and targeted discounts for the poorest homes.
“Come October that’s going to get horrific, truly horrific,” said Anderson. “It has got to a stage now where the size...