Business secretary warns against increasing energy prices for those cutting back

In a letter to domestic energy suppliers, the business secretary set out his “expectations on the setting of consumer direct debits”, stating it was “critical consumers are able to manage their bills effectively” adding that direct debits can be an “efficient way” for families to “smooth” their energy costs over the year.   

He, however, went on to say: “I was disturbed to read media reports that some consumers are saying their direct debits are going up when they are making huge efforts to reduce their usage to save money at a time when household incomes are squeezed. 

“It is in all our interests that when consumers take sensible steps to reduce their own bills, such as reducing their boiler flow temperature or making their homes more energy efficient, that they are able to see an impact in their bills.  

Households shouldn’t see their direct debits rise when their energy use falls

My letter to suppliers making clear people’s bills should reflect the energy they use 👇 pic.twitter.com/Lrsdtsjroz

— Rt Hon Grant Shapps MP (@grantshapps)

Households shouldn’t see their direct debits rise when their energy use falls

My letter to suppliers making clear people’s bills should reflect the energy they use 👇 pic.twitter.com/Lrsdtsjroz

— Rt Hon Grant Shapps MP (@grantshapps) November 27, 2022

“I am very keen that all suppliers find a way to make their systems more responsive to these positive changes in consumer behaviour and have asked Ofgem to report to me on how this can be achieved. With other increasing for households, it is critical that we do what we can to help. 

“I am interested to understand how you intend to ensure that your direct debit system does not over-estimate charging.”  

Following this letter, two of the UK’s biggest utilities have suggested UK households have cut their gas and electricity usage by more than 10% since October with Britain’s second-largest supplier E.ON and Utility Warehouse owner Telecom Plus both reporting double digit declines.  

E.ON’s chief executive Michael Lewis said the supplier was “seeing reductions of 10 to 15%” against seasonal averages. He explained: “It’s quite a big effect.  

“We’re analysing our data and trying to understand what’s happening. It will likely be people putting the heating on for shorter periods or turning down the thermostat in their home.  

“Those are the two big levers.”

 
Meanwhile Andrew Lindsay, Telecom Plus’s chief executive, said gas use was down about 10% in recent months with the firm expecting there to be a “further decline in consumption as people self regulate". He added: “We’re forecasting a further double-digit decline in consumption.”