U.K. Energy Bosses Warn of Steep Increase in Customers’ Debt
Britain’s biggest energy suppliers warned of a huge increase in the number of customers they expect will go into debt as households struggle to pay rising bills.
Customer borrowings are expected to be 50% higher by the end of the year, Michael Lewis, chief executive officer of the U.K. arm of EON SE, told a panel of lawmakers Tuesday. The maximum amount that suppliers of natural gas and electricity in the U.K. are permitted to charge 22 million customers surged to a record level on April 1 and is predicted to increase further later this year.
“Come October, that’s going to get horrific, truly horrific,” Keith Anderson, CEO of Scottish Power Ltd. told the same parliamentary panel. “The size and scale of this is beyond what I can deal with, beyond what I think the industry can deal with. It needs a massive shift, significant shift in the government’s approach to this.”
Rising energy costs are driving a cost of living crisis in Britain. Overall, the average family will be 1,100 pounds ($1,433) worse off over the next 12 months, according to the Resolution Foundation. That’s going to cause mounting debt as people struggle to pay. The government has pledged a 9 billion-pound package to help with energy bills but this has been criticized as not enough.
“It will get worse without any further intervention in October, a lot worse,” said Chris O’Shea, CEO of the U.K.’s biggest supplier Centrica Plc.
Lawmakers called in the bosses of the four biggest companies -- EON, Centrica, EDF Energy Ltd. and Scottish Power -- to answer questions on how energy is priced for consumers.
