Yahoo Finance OPINION - City comment: Rishi Sunak must act now to tackle ‘horrific’ energy bills
“Horrific, truly horrific.”
That’s how the CEO of Scottish Power describes the state of household energy bills come October when the price cap is once again be reviewed. It is likely to rise again to around £2,600. That’s around a twelfth of the average annual salary - before tax.
You might expect chief executives in the power sector to be cheering soaring bills. Surely they signal higher profits?
But Keith Anderson, the Scottish Power boss, is practically begging the government to step in and lower people’s bills.
He told MPs on the business select committee yesterday: “The size and scale of this is beyond what I can deal with. It needs a massive shift in the government’s approach to this.”
Faced with soaring wholesale oil and gas prices, energy companies have little choice but to hike household bills or face losses. (This is not so for wholesale producers like BP or Shell who are simply coining it.)
But higher bills more often than not simply mean more debts and unpaid bills. That is misery for customers and hassle for companies. No one goes to work in the morning because they want to chase old ladies for unpaid heating bills.
Energy bosses realise this is unsustainable. So far, the government doesn’t seem to. The Chancellor’s intervention to date has been akin to tackling a forest fire with a water pistol.
He can no longer ignore it. Experts think sky-high bills could continue for years, not months.
Centrica boss Chris O’Shea told MPs: “It will get worse without any further intervention in October, a lot worse.”
It’s time to act.
