'Better than 50-50 chance energy bills won't rise in April', Martin Lewis says
27 February 2023, 18:56 | Updated: 27 February 2023, 19:02
Martin Lewis has said that there is a more than 50% chance that the government will intervene to stop energy prices rising drastically in April.
Money saving expert Mr Lewis has been pushing for the government not to increase Brits' energy bills by 20% in April by increasing the energy price guarantee.
Households pay the lower of the price guarantee, set by the government, and the price cap, which is set by regulator Ofgem. With the price guarantee rising from £2,500 a year to £3,000 from April, bills are expected to increase by around £500.
In a campaign he said is backed by 85 charities, Mr Lewis said that the price cap will drop below the price guarantee in July, and said that increasing prices for three months was an "act of national mental health harm".
Mr Lewis told LBC's Tonight with Andrew Marr on Monday: "From July, the prediction is from July the price cap will drop below the price guarantee so we’ll start to see prices drop.
Martin Lewis demands the UK government intervenes to stop energy prices going up in April.
"That was the reason I wrote to the Chancellor three weeks ago, now supported by 85 charities."
Addressing the government, Mr Lewis said: "Don’t do it! Protect people from getting the letters, protect people from inflation going up, it is a national act of mental health harm.
He added that increasing the cap is "not a very clever move either" politically, "because it’s the government that sets prices, not the regulator, not firms, it’s the government."
Mr Lewis said: "Reading the runes, and I’m careful with my phrasing here, I think we may get a win here. I think there’s a better than 50/50 chance of it not going up…
"I think it has to come before the budget as well. Because if you leave it to the budget, energy companies are obligated to write to people saying that their bills are going up 20%."
Shadow Chancellor says if she were in government today she'd be freezing all energy prices.
It comes after energy regulator Ofgem said on Monday that the energy price cap would drop by £1,000 to £3,280 from 1 April. Ofgem lowered the price cap from £4,279 per year to £3,280 effective from April 1 to reflect a fall in the wholesale price of energy.
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The government’s £400 energy rebate scheme, paid in six instalments of £66 and £67 a month, is also coming to an end this month.
Ofgem said: "This reduction in the price cap level reflects a significant reduction in the cost of buying and providing energy for customers. If it continues, it will mean that by the summer, prices paid by consumers will drop for the first time since the global gas crisis took hold more than 18 months ago."
Ofgem CEO Jonathan Brearley said: “Although wholesale prices have fallen, the price cap has not yet fallen below the planned level of the Energy Price Guarantee. This means, that on current policy, bills will rise again in April. I know that, for many households this news will be deeply concerning.”
“However, today's announcement reflects the fundamental shift in the cost of wholesale energy for the first time since the gas crisis began, and while it won’t make an immediate difference to consumers, it’s a sign that some of the immense pressure we’ve seen in the energy markets over the last 18 months may be starting to ease.
"If the reduction in wholesale prices we’re currently seeing continues, the signs are positive that the price cap will fall again in the summer, potentially bringing bills significantly lower.”
“However, prices are unlikely to fall back to the level we saw before the energy crisis. Even with the extensive package of government support that is currently in place, this is a very tough time for many households across Britain.”
“Where people are struggling, we urge them to contact their supplier to make sure they are getting all the help and support they are entitled to. We also think that, with bills continuing to be so high, there is a case for examining with urgency the feasibility of a social tariff for customers in the most vulnerable situations.”
But Citizens Advice chief executive Dame Clare Moriarty said the cost to Brits could be even higher than £500.
She said: "For most people, on average, we're going to see a £900 increase in people's bills.
"Now we know that that's going to be unsustainable for very many people. We estimate that the number of people who simply won't be able to afford their energy bills will double.
"So we'll go from one in 10 people to one in five people. That is a huge number of people.
"That's why we're saying that the Government has to keep the energy price guarantee where it is at the moment - £2,500."
Dame Clare added: "We believe there are about three million people who would be paying more than 10% of their income on energy who won't be entitled to any of the targeted support that the Government's going to make available, so we are talking about literally millions of people who are going to see catastrophic impacts."
The next quarterly price cap update will be on 26 May 2023.
