E.ON boss says number in fuel poverty will double in October - 'This is too big for us to manage'

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·Freelance news writer, Yahoo UK
·3-min read
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'The scale of this is simply too big for us to manage at the moment': E.ON's UK CEO Michael Lewis on Sunday. (PA)
'The scale of this is simply too big for us to manage at the moment': E.ON's UK CEO Michael Lewis on Sunday. (PA)

The boss of one of the “big six” energy companies has said the number of people in fuel poverty will double by October amid the cost of living crisis.

Michael Lewis, E.ON's UK CEO, said the average annual energy bill could top £3,000 when Ofgem raises the energy price cap again in four months’ time. The previous price cap rise last month saw bills rise from £1,277 to £1,971.

And appearing on the BBC’s Sunday Morning show, Lewis said: “We are seeing a significant number of people in fuel poverty - that’s to say more than 10% of their disposable income spent on energy - and that’s risen to 20%.

“And in October [when the price cap lifts again] our model suggests that could rise to 40% if the government doesn’t intervene in some way.”

The type of bill people are most concerned about. (ONS)
Office for National Statistics research has showed energy bills are by far the type people are most worried about in the cost of living crisis. (ONS)

By October, he suggested 1.5 million of E.ON’s eight million customers will be struggling to pay their bills.

He said: “There are around one million of our eight million accounts that are already in some kind of arrears - not all of that turns into bad debt, some people are just late payers - but we expect that number to increase by around 50% come October when the price rises again.

"That is a very significant impact and why we have called upon the government to take more action. We do need more intervention in October and it has to be substantial.”

Watch: Sunday's politics briefing

In March, chancellor Rishi Sunak announced a package of support including a £200 up-front rebate on energy bills from October – though this will have to be repaid over five years from 2023 – plus a £150 council tax rebate for homes in bands A to D effective this month.

However, this was widely criticised as not going far enough and Sunak has suggested more measures will be implemented in the autumn.

Lewis, who is on a reported £1m salary and whose company made £6.6bn profits last year, said how he listens in to customer calls and went on: “Frankly some people are at the edge, they simply cannot pay.

Read more: Which? reveals hundreds of popular food items that have soared in price

“That will get worse once prices rise again in October. We are entering the summer period where people are turning their heating off anyway… October will see a price rise and increase in consumption - that’s when it’s going to hit.”

Questioned on the measures E.ON itself is taking, Lewis claimed the company is trying to identify customers who are struggling but added: “The scale of this is simply too big for us to manage at the moment.”

Hinting at his support for a windfall tax on oil and gas firms - currently a topic of intense debate within government - Lewis said it is up to the government to “tax those with the broadest shoulders”.

Speaking to Times Radio on Sunday, cabinet member Anne-Marie Trevelyan said the government is encouraging energy companies to use surplus profits to invest in green alternatives rather than impose a tax on them which would alleviate the cost to consumers.

She said: "The windfall tax is a very short-term measure. What we want is to ensure we can both stabilise and gain more resilience to our energy systems, and really it’s the energy companies who are able to do that at pace, so that’s what we want to be encouraging them to do.”

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