Energy giants putting up charges by HUNDREDS of pounds without warning

2022-08-12

‘It’s impossible, they’re hiking my direct debit by 88%’: Fury at energy giants for putting up monthly charges by HUNDREDS of pounds without warning – amid prediction price cap will hit £5,200 next year

Energy firms accused of doubling or tripling monthly bills before energy prices rise this Autumn
Don’t Pay UK, which launched in June this year, is seeking a million pledges before calling for ‘energy strike’
It comes as hard-pressed consumers slammed firms for offering eye-wateringly high fixed rate offers
Have you had your direct debit raised automatically? Email [email protected]

Energy companies have today been accused of doubling or trebling direct debits without permission – taking some bills close to £1,000-a-month – in what customers are calling ‘the great fuel robbery’.

EDF, British Gas, Bulb and Shell Energy are among the companies named and shamed online as many Britons said they cannot afford hundreds of pounds per month extra as the cost of living crisis strangles household budgets.

Experts at the energy consultancy Auxilione said they expect household bills to hit £4,538 in January and peak at £5,277 in April – and analysts have suggested prices will not return to 2020 levels for a decade.

But even before the energy price cap is lifted, and despite being in the middle of one of the hottest summers in history when energy use would tend to be lowest, energy firms have been merrily bumping up direct debits. And victims have taken to social media to share their horror stories.

One unhappy customer wrote: ‘This is not acceptable @edfenergy. How do you expect people to find £473 every month? £252 per month is nigh on impossible to find and you’re hiking my direct debit by almost 88%’.

An EON customer whose direct debit has been changed to £959-a-month from £714 from September 1 shared his bill, calling the company ‘cash grabbing’ and declaring: ‘I refuse to pay it’. Another said: ‘Despite being £177.17 IN CREDIT – @eonenergyuk have decided to double my monthly direct debit…again….’.

Another tweeted: ‘@ShellEnergyHome why have you automatically changed my direct debit – you’ve already massively overcharged me on this months bill, I haven’t agreed to the change – absolutely ridiculous “let’s just change it without asking if they can afford it”. No wonder everyone’s cancelling direct debits when you just go and change them’.

Customers have taken to social media to share their direct debit hell

Martin Lewis has claimed rising energy prices were a ‘cataclysmic’ financial emergency ‘that risks lives’ as survey released by Uswitch this week suggested households are already getting in mounting debt with energy suppliers.

How energy bills have increased over time

2018 – £1,300

2019 – £1,353

2020 – £1,295

2021 – £1,339

(Average household bill – House of Commons Library)

January 2022 – £1,309

August 2022 – £1,971

(Ofgem price cap)

October – £3,582

January 2023 – £4,266

(Cornwall Insight forecasts)

v its forecasts last week

October 2022: £3,359

January 2023: £3,616

It estimated that six million homes across the UK collectively owe around £1.3 billion to energy firms – three times higher than a year ago.

Mr Lewis – who sold his MoneySavingExpert.com website for £87million in 2012 – said: ‘For every £100 direct debit you currently pay, in October you will be paying £181, and in January you will be paying £215, and that’s on top of the rises we had in April.

‘That is a cataclysmic rise for households; millions of households will simply not be able to afford it. What we’re facing here is a financial emergency that risks lives.’

A survey estimated that six million homes across the UK collectively owe around £1.3billion to energy firms – three times higher than a year ago.

More than 100,000 ‘energy bill martyrs’ including a Church of England curate say they will stop their payments this winter as forecasts showed bills could surge to £5,000-a-year in early 2023.

Tens of thousands have pledged support to Don’t Pay UK, a civil disobedience campaign urging people to cancel energy bill direct debits.

Founder Jake Cable said: ‘They don’t have the right to take as much money for energy as they do for rent or their mortgage’.

At the same time, a poll shows rising anger with what some see as the failure of politicians to address a crisis facing millions of households who will struggle to feed their families, keep the lights on and stay warm.

Polling by Public First found most Britons expected a boycott of bills or taxes, while a third said there was a risk of public protests echoing the poll tax riots in the early Nineties.

Furious Brits today accused energy firms of forcing them to ‘gamble’ with ‘stick or twist’ fixed-rate offers that are more than double what they currently pay.

Hard-pressed customers across the country insisted fat cat bosses were ‘holding them to ransom’ amid uncertainty over whether prices could rise even higher in the new year.

Matt Reed, a 32-year-old aircraft engineer from Cornwall, was outraged when his energy provider sent him an email urging him to opt for a fixed contract of more than £3,600 a year.

He told MailOnline: ‘I received an email from British Gas yesterday ”recommending” that I move onto a new fixed tariff. I currently pay £1864 per year, which is grim enough, yet they want me to fix at £3672!

‘When will this end? The point of a ”cap” is to prevent prices from increasing. It’s an absolute farce and something needs to be done ASAP to stop these hugely profitable, greed fuelled corporations taking even more money from the public.’

Liam Lewis, an NHS worker from Bournemouth, will see his bills more than double from £1,655 to £3,834 a year if he locks into a 12-month fixed deal.

He and his wife Alice, a part-time NHS nurse, are already paying £100 a month – £60 more than this time last year. So the couple were shocked to see the latest quote for a fixed deal would triple their monthly payments to £300.

The couple, who live in a two-bedroom semi-detached home with their 19-month-old son Arlo, are currently on their energy giant’s Octopus’ flexible tariff. But they are now so worried about rising bills they are not sure whether to fix into an expensive deal or stay put.

Liam, 38, says: ‘We have a young family and nursery fees have already increased for the second time this year. It’s difficult to see where we are going to get this extra money.’

Others have complained of seeing sudden, unexpected increases in their energy bills that risk pushing them into financial ruin.

Martin Tang, 62, has run the Royal Crown Chinese takeaway in Torry, Aberdeen since the 1980s, was left stunned when he received a £10,000 gas bill in the post covering just three months.

This was later reduced by SSE to £3,0807, with £1,429 for electricity. But he has now been offered a new contract that would see him pay £6,000 a quarter.

‘Normally my quarterly gas bill with SSE is just over a thousand and the electricity about the same so that brings it to around £2,000,’ he told MailOnline.

‘The new contract I’ve been offered is £6,000 a quarter. I don’t know what to do, the government need to step in.

‘I could shut the shop as a temporary measure but the money in the bank won’t last. I’m facing a really daunting task. We need the government to come up with something straight away.’

Recruitment director Ian James, 47, has been quoted £1,047 for a fixed-rate tariff with Scottish Power – almost double his current direct debit payment of £538 – and insists he won’t be taking up the option.

The father-of-three from Basingstoke told MailOnline: ‘It’s not just low-income families that are going to be affected. My wife and I both have decent jobs and a good income but this is ridiculous, and we’re going to have to make cutbacks just like everybody else.

‘When you see these companies making obscene profits when everyone else is struggling so much, it’s just not right.’

Today, energy bosses were hauled to Downing Street today for an emergency meeting attended by Boris Johnson and senior ministers – which concluded with no plan being agreed amid warnings bills could hit £5,000 next year and stay high for a decade.

During the meeting, Chancellor Nadhim Zahawi made clear ministers would continue to evaluate the ‘extraordinary profits’ of energy firms and the ‘appropriate and proportionate steps to take’, according to a Treasury read-out.

However, Mr Johnson told the companies that any ‘significant fiscal decisions’ would be for the next prime minister to take.

Ministers had vowed to ‘bang heads together to find a solution to the crisis, but the gathering ended with vague promises that companies would continue ‘working together’ with the government to help struggling households.

Mr Zahawi is said to be using the threat of toughened up windfall tax to persuade energy firms to invest more in renewable energy.

Matt Reed, a 32-year-old aircraft engineer from Cornwall, was outraged when his energy provider sent him an email urging him to opt for a fixed contract of more than £3,600 a year

Martin Tang, 62, who’s run the Royal Crown Chinese takeaway in Torry, Aberdeen since the 1980s, has been offered a new contract costing £6,000 a quarter

The takeaway owner was left stunned when he received a £10,000 gas bill in the post covering just three months

Bosses pictured entering Number 11 today included Michael Lewis, the £1million-a-year CEO of E.on, Tom Glover of RWE, and Clare Harbord of power generator Drax.

The companies made £3.9bn, £2.4bn and £225m consecutively before interests and taxes – with the figure for E.on applying to its German parent company.

Jonathan Brearley, who receives a reported £300,000 in pay and perks to lead regulator Ofgem – which sets the price cap – was also in attendance.

Revealed: What the energy fat cats are taking home

Chris O’Shea (CEO – Centrica): £875,000

Kate Ringrose (chief financial officer – Centrica): £933,000

Keith Anderson (CEO – Scottish Power): £1.15m

Michael Lewis (CEO – E.On): £1m

Simone Rossi (CEO – EDF): £1m

Executives were asked to submit a breakdown of expected profits and payouts, as well as investment plans, according to reports. .

Tory leadership contenders Rishi Sunak and Liz Truss have continued to face questions about what they will do to help struggling families, while Labour has called for a ‘loophole’ in the oil and gas windfall tax to be closed to raise more support cash.

Experts at energy consultancy Auxilione said that at yesterday’s energy prices they expect Ofgem could be forced to set the cap at £5,038 per year for the average household in the three months beginning next April.

In news that heaps extra pressure on households across Britain, it also predicted that bills would reach £4,467 in January – £200 higher than an already grim forecast from fellow consultant Cornwall Insight.

This forecast is likely to worry energy users more than April’s higher number, as households use more gas during the winter months. As it stands, the nightmare scenario would mean that an average household will spend £571 on energy in the month of January.

The price cap on energy bills is calculated based on average household use. If you use less energy, then your bills will be lower. The latest prediction is that the cost of gas will be capped at 18.02p per kilowatt hour and 70.34p per kWh of electricity.

The new prediction is based on today’s energy price on wholesale markets. The final price is calculated by tracking the wholesale price over several months. It comes just hours before ministers are meant to sit down with energy companies to discuss the bleak winter ahead.

There has been anger at Shell, BP and British Gas owner Centrica announcing bumper financial results as households struggle.

Former prime minister Gordon Brown has suggested scrapping the price cap and negotiating lower rates with energy bosses.

It comes as more than 100,000 people have now joined a campaign calling on households to stop paying their energy bills.

Don’t Pay UK, which launched in June this year, is seeking a million pledges before it calls for a nationwide energy strike – despite warnings anyone taking part risks getting into debt, damaging their credit rating and even having their property repossessed.

Michael Lewis, the £1million-a-year CEO of E.ON (left), and Ofgem chief executive Jonathan Brearley (right) – who receives a reported £300,000 per year in pay and perks – arriving at today’s Downing Street meeting

Clare Harbord of power generator Drax (left) and Tom Glover, country director of RWE, also attended today’s meeting

Boris Johnson attending today’s energy round table with company bosses at Number 11 Downing Street

Chancellor Nadhim Zahawi (left) and Business Secretary Kwasi Kwarteng (right) will press gas and electricity company executives for solutions to the predicted spike in bills over winter

After today’s meeting, Mr Johnson said: ‘Countries around the world are feeling the impact of Putin’s damaging war in Ukraine. We know that this will be a difficult winter for people across the UK, which is why we are doing everything we can to support them and must continue to do so.

‘Following our meeting today, we will keep urging the electricity sector to continue working on ways we can ease the cost of living pressures and to invest further and faster in British energy security.

Which energy suppliers met with ministers and how much profit do they make?

Energy bosses were hauled in front of ministers on Thursday amid nightmare predictions that the average household bill might go up to £5,000 from April after a winter of soaring heating prices. Energy companies have been calling for immediate help for customers. The price cap on bills prevents the firms from taking excess profits from the gas and electricity they sell to households.

The companies are currently allowed to make earnings before interest and tax (Ebit) of just £35 per household. But they allowed to pass on the massive rises in wholesale energy prices to customers. This is why prices are rising.

Who are the biggest energy suppliers in the UK that have been meeting with ministers?

British Gas

British Gas is the biggest energy supplier in the UK with millions of customers on its books. Operating profit fell by 43% at British Gas in the first six months of 2022, hitting £98 million during the period. That is £6 per customer after tax.

However its owner Centrica did considerably better. Although the company has been slowly getting out of the fossil fuel business – it used to produce lots from the North Sea – it still has some residual oil and gas production.

Adjusted operating profit reached £1.3 billion, up from just £262 million a year earlier as the company benefited from selling fossil fuels at higher prices on the wholesale market. Centrica will be forced to pay a windfall tax on the profits it gets from the North Sea part of the business.

E.on

E.on UK is owned by a German parent company with the same name. In the first six months of the year the business made adjusted earnings before interest and tax (Ebit) of 289 million euros (£245 million) in the UK, up 77% on the year before. Its German parent made £3.9bn.

EDF Energy

EDF Energy is owned by France’s state-backed energy provider EDF. The company made earnings before interest, tax, depreciation and amortisation (Ebitda) of 860 million euros (£728 million) in the UK in the first six months of this year.

It was a rise of more than 200% compared to the 267 million euros (£226 million) in the same period a year ago. Most of this was because EDF produced more electricity from its nuclear plants in the country. It was partly helped by higher prices of the energy it sold to businesses, but was weighed on by the sale of energy to households.

Octopus Energy

Octopus Energy is a privately-owned energy company, so only releases its results annually. The company’s last set of numbers shows it managed to halve operating losses from £63 million to £31 million in the year ending April 30, 2021. It took a £150 million hit to help customers through the energy crisis.

ScottishPower

ScottishPower is owned by Spanish energy giant Iberdrola. In the first six months of 2022 the business made an Ebitda of £924.6 million – a rise of 2.6%,. Most of that was thanks to a jump in the money its wind turbines and other renewable generation made from selling electricity.

The company’s retail business, which sells energy to customers, made £54.3 million in Ebitda over the period, a reduction of 60%.

Others

Ministers also met with representatives from RWE, the German energy giant, Drax, which produces power from burning wood pellets and gas, Greencoat Capital, a renewable energy investor, Intergen, which burns gas to make electricity, Germany’s Uniper, National Grid, power generator SSE, Dutch energy firm Vitol, Denmark’s Orsted, and trade body Energy UK.

‘We are continuing to roll out government support over the coming months, including the second £324 instalment of the cost of living payment for vulnerable households, extra help for pensioners and those with disabilities, and the £400 energy bills discount for all households.’

Mr Zahawi added: ‘This morning I hosted industry leaders from the electricity sector to discuss what more they can do to work with Government and act in the interest of the country in the face of rising prices caused by Putin’s illegal invasion of Ukraine.

‘We have already acted to protect households with £400 off energy bills and direct payments of £1,200 for 8 million of the most vulnerable British families. In the spirit of national unity, they agreed to work with us to do more to help the people who most need it.’

Tory leadership candidate Mr Sunak has pledged ‘hundreds of pounds more’ energy bills support.

He told the BBC that it would be his ‘moral responsibility’ to offer more help with bills if he were selected as prime minister, in particular to pensioners and those on benefits.

Ms Truss appeared to back away from her previous position of providing no more ‘handouts’, telling GB News she would ‘do everything I can to support working families’ if made prime minister, while emphasising her preference for tax cuts.

The Foreign Secretary said she would act ‘as soon as possible’ with an emergency budget and was ‘determined to help people across this country through what will be a very difficult winter’.

Asked if she would consider removing VAT from energy bills, saving families around £210, she said: ‘There will be a budget on an urgent basis to deal with the issues we face. All of these issues need to be under consideration.’

Miss Truss declined to go into detail about how much support she would hand out, but repeated her pledge to ‘let people keep more of their own money’ through lower taxes.

Labour has called on the Government to close investment allowances in the energy profits windfall tax, which it has described as a ‘loophole’, in order to help households pay the bills.

Shadow chancellor Rachel Reeves said: ‘The Tories are handing oil and gas giants billions in tax breaks, just for them to pass it on to shareholders. The Government should be ashamed this loophole existed in the first place.

‘This isn’t right at a time when people are worried sick about how they’ll pay their bills.’

There has been widespread anger at Shell, BP and British Gas owner Centrica announcing bumper financial results while households struggle with soaring bills.

Mr Brown meanwhile told the Guardian that the Government should ‘pause any further increase in the cap’ on bills, and negotiate lower rates with each individual company after examining their balance sheets.

He also suggested ministers should temporarily nationalise any providers that go bust.

‘Time and tide wait for no-one. Neither do crises. They don’t take holidays, and don’t politely hang fire – certainly not to suit the convenience of a departing PM and the whims of two potential successors,’ the former Labour prime minister said.

He added that Britain should spearhead the international response to the crisis with an emergency G20 meeting.

Mr Brown said: ‘British ministers – and no one has yet grasped this – should also be leading the way… in demanding coordinated international action with an emergency G20 early in September to address the fuel, food, inflation and debt emergencies.

‘These are global problems that can only be fully addressed by globally coordinated solutions.’

Mr Brown, who previously called for the Tory leadership contenders to set aside their differences and work on an emergency plan with Boris Johnson, has been joined in his calls by a boss at one of the UK’s biggest energy companies.

Philippe Commaret, managing director of customers at EDF, said: ‘We are asking Government and the two Conservative candidates to work with industry so we can find a viable solution for those customers most in need this winter.

‘Customers need to know now that help is coming. Delaying a decision will cause anxiety for millions of people, and discussions need to happen now.’

Consumer champion Martin Lewis also made similar calls, telling broadcasters: ‘I accept the point that Boris Johnson is running a zombie government and can’t do much, but the two candidates – one of them will be our prime minister – they need to get together in the national interest to tell us the bare minimum of what they will do.’

EU prices are at near-record levels amid fears Russia could soon turn off the gas tap completely, with leaders already discussing energy rationing

UK gas prices are soaring after Russia began throttling off supplies to Europe, causing a global shortage as EU leaders scramble for supplies

Energy bills has rocketed in recent months due to the rising price of natural gas, partly as a result of the war in Ukraine. Germany is, by a long way, the largest importer of Russian gas in the EU, but rising prices affect the UK too

Russia has reduced flows through the Nord Stream 1 pipe which goes to Germany to just 20 per cent capacity, sparking panic

A Government spokesperson said: ‘We are engaging with the electricity sector to drive forward reforms and to ensure the market delivers better results for people across the UK.

Where’s Keir? On holiday…

Labour is under pressure to explain why Sir Keir Starmer is on holiday after the party accused ministers of going missing at a time of crisis. Sir Keir has been away for the past week and yesterday one of his frontbench team faced questions about when he will return and set out his plans for tackling energy bills.

Shadow education secretary Bridget Phillipson was asked on Sky News: ‘Where is Keir Starmer?’ She replied: ‘I think like everyone Keir Starmer is entitled to a holiday.’ On BBC Breakfast she was asked by presenter Sally Nugent: ‘I’m just interested to know, where is Keir Starmer?’ Miss Phillipson said: ‘We will hear further very, very soon about additional measures.’

Energy minister Greg Hands said in response to Labour adverts accusing the Government of going missing: ‘Sir Keir is on holiday. I have no problem with that. But why, from the sun lounger, put out a press release attacking the PM for being on holiday?’

‘In the meantime, and as we announced in May, the Government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take.’

Yesterday, consumer champion Mr Lewis warned the cost of living crunch was turning into a ‘national crisis’ on the scale of the Covid-19 pandemic and accused ministers of acting like ‘zombies’.

‘That is a cataclysmic rise for households; millions of households will simply not be able to afford it.’

He said a typical bill from January will be 45 per cent of the full new state pension, adding: ‘What we’re facing here is a financial emergency that risks lives.

‘I accept the point that Boris Johnson is running a zombie Government and can’t do much, but the two candidates need to get together in the national interest to tell us the bare minimum of what they will do.

‘If they can’t agree… what we need to hear now, because the mental health damage for millions of people who are panicked about this is manifest, is we need to hear accurate plans.’

A survey released yesterday by Uswitch suggested households are already getting in mounting debt with energy suppliers, even before the energy price cap is lifted.

It estimated that six million homes across the UK collectively owe around £1.3 billion to energy firms – three times higher than a year ago.

Liz Truss yesterday at a laid-back chat at Bedford Sports and Social Club in Greater Manchester. Both she and Rishi Sunak have come under pressure to produce a plan for tackling high energy bills

Mr Sunak (pictured during a visit to a synagogue in north London yesterday) has pledged ‘hundreds of pounds more’ energy bills support

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