Energy UK calls for new targeted social discount scheme as Ofgem prepares to announce a three-year high energy price cap on Wednesday

Energy UK, the body representing energy suppliers, has publicly called on the government to introduce a new, better-targeted support scheme for households struggling with energy bills, ahead of Ofgem announcing its winter price cap on Wednesday 26 August. The cap is expected to rise by 4%, reaching a three-year high and applying to approximately 33 million households in England, Wales and Scotland on standard variable tariffs. Energy UK chief executive Dhara Vyas said that while suppliers are doing all they can, the existing £150 Warm Home Discount is insufficient, with record customer debt of £4.7bn owed to suppliers at the end of last winter. The body argues the current scheme reaches six million customers but leaves a further 2.5 million who need support because of medical conditions or high energy consumption without adequate help. Energy UK's proposed "social discount" scheme, which would take into account a customer's income, health and energy consumption, is estimated to cost £1.9bn, nearly double the current scheme's cost, and could offer up to £450 in support to some households. The body suggested the scheme could be part-funded through bills or shifted entirely to the taxpayer. The 4% cap rise follows a sharper 13% rise in July. Energy consultancy Cornwall Insight attributed the latest rise to continued Middle East conflict pushing up wholesale prices and European heatwaves increasing demand for power generation. The rise is expected to outweigh the impact of the government's decision to remove VAT on household electricity bills from October, a policy introduced by Prime Minister Andy Burnham.