Campaign win: we’ve stopped energy bills going up to pay for bad debt

We’re so happy to let you know that we’ve scored an important victory in our End Energy Debt campaign.

Recently, we emailed supporters about a consultation that the energy regulator Ofgem was holding on what to do about the £2.3 billion of household energy debt that has built up during the cost of living crisis.

The proposal was to allow energy companies to charge all of us more so they could recoup the potential losses from ‘bad debt’ that is unlikely to ever be paid back. The reason why so much of this debt is unlikely to be paid back is that households simply do not have the money available. Our latest analysis, covered in the Observer, shows 12.8 million people in the UK are now heavily weighed down by their debts.  

Almost 2000 of us wrote to Ofgem pointing out how unfair it would be to bail out the energy retail companies. We won this battle and Ofgem agreed that our bills shouldn’t go up just to cover the debts that have built up over this period! This is welcome news and wouldn’t have happened without thousands of Debt Justice supporters acting. 

We are pleased that our action has helped prevent energy bills going up even higher, but the privatised energy system remains broken, and we have heard very little from the government about the how they are going to fix it.  

Instead, Ofgem are now consulting on a series of tweaks to pricing, regulation, and enforcement. This includes providing stronger protections for people who are pushed into energy debt and have a pre-payment meter force fitted. However, these inadequate proposals would allow the disgusting practice to continue, when what we need is an outright ban.  

They are also proposing more complex tinkering by allowing energy retail companies to recover more of their costs for providing customers extra credit when they are at risk of disconnection.  

These measures do not go far enough to protect people in energy debt – despite recent falls in average energy costs, 5.5 million households are now estimated to be behind on payments. That is why we recently wrote to the Secretary of State for Energy with other charities and debt advice organisations calling for a ‘Help to Repay’ scheme. This scheme would provide much needed government support to write off some or all of the energy debt weighing down households. 

Profiteering continues to extract money from our communities that we simply do not have. Outrageously, Ofgem have also proposed allowing energy retailers to make bigger profits by increasing the Earnings Before Interest and Tax (EBIT) allowance.  

We need wholesale reform of our energy system to reduce our dependence on expensive and polluting gas and to ensure everyone has access to affordable, clean energy. That is why we are building power with allies such as Unite the union to #TakeThePowerBack from the profiteers, with the Warm This Winter coalition, as well as supporting the Energy For All campaign.

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