Energy boss compares rising bills to 'paying £25 for a pint of beer'

The head of one of the UK's energy companies has compared soaring bills to "paying £25 for a pint of beer".

Greg Jackson, founder and chief executive of Octopus Energy, made the comparison to illustrate how much gas and electricity prices have increased in recent months.

His comments come as energy regulator Ofgem is set to announce the latest price cap on Friday, with predictions it could rise from £1,971 to about £3,600.

There could be worse to come for Britons, with the latest market research predicting that average annual energy bills could top £6,000 by next April.

Watch: Chancellor says no easy options as inflation soars

Liz Truss, the strong favourite in the race to become the next prime minister, is under increasing pressure to come up with a workable plan to solve the problem in the midst of a cost-of-living crisis.

Jackson, who is calling for government intervention ahead of further price cap rises, told BBC Radio 4’s Today programme on Monday: “I think the spate of failures within the 29 companies that went bust last year, that was driven by gas prices roughly doubling.

"They’re currently nine to 11 times higher than usual.

“Look, to put that in perspective, if this was beer, we’re talking about the wholesale price being £25 a pint.

“People don’t know what a therm [unit of heat energy] is, but, underneath it, the price per therm has gone from 60p to around £5 at the moment and that’s what’s passing through to customers if we don’t do something.

“There are systemic issues. There are loads of questions of how we pay for this. One thing we can’t do is be expected to pass those costs on to consumers.”

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Every UK household will receive a £400 cost of living payment from their energy provider to help with soaring bills this winter, but consumer campaigners have said this isn't anywhere near adequate.

At the weekend, British Gas outlined how its customers will receive the payment, in six monthly instalments of £67 between this October and March 2023.

On Monday, Truss was urged to be more transparent with her plans for an emergency budget to address the crisis.

She has said would bring forward urgent plans to address rising energy bills if she becomes prime minister on 5 September.

But Conservative MP Mel Stride, who chairs the Commons Treasury Committee, called into question reports she is not planning to ask the independent Office for Budget Responsibility (OBR) for a forecast ahead of introducing those measures.

Stride, a Rishi Sunak supporter, told LBC: “At the moment the Liz camp are saying I believe that there will not be any OBR forecast produced at that time and that is kind of like flying blind.

“It means that you do all these dramatic things on tax etc but you don’t actually know what the independent forecaster believes the impact will be on the public finances and I think that is quite a serious situation were that to come about.”

"We are asking for transparency and reassurance that whatever whoever wins this contest comes forward with is affordable and not reckless.”

Another energy company boss called on the Conservatives to end the leadership contest early to address rising bills.

Bill Bullen, chief executive of Utilita, told the Today programme: “All through the summer, we’ve been hearing about customers in distress, customers who are worried that they’re not able to heat their homes over this coming winter.

“That’s why we’re saying to the government, you’ve got to take this decision to freeze prices at their current level right now.

“This cannot wait until the 5th or 6th of September. The Conservative Party needs to sort themselves out, decide who the leader is going to be this week, so that the Ofgem announcement on the 26th doesn’t have to happen.”

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