Energy minister tells suppliers to step up on unpaid bills before £2.5bn write-off

The minister for energy consumers, Polly Billington, has told the bosses of Great Britain’s largest energy suppliers to do more to help households get on top of unpaid bills this winter. Energy bosses were summoned to an online roundtable on Thursday to discuss a government plan to pay down the energy debts of about 2.4m of the hardest-hit households. The government is preparing to spend almost £2.5bn to help write off the country’s record-high energy debt.

The debt relief scheme is part of a wider “circuit-breaker” strategy announced by the chancellor in last month’s budget. Household energy debt could hit £7bn by the end of the year. Billington is understood to have told bosses from Octopus Energy, British Gas and EDF Energy that suppliers would still need to play a “crucial role” alongside the multibillion-pound support package.

Suppliers are expected to proactively spot customers who may be under financial strain and offer help such as debt payment plans or point them toward debt advice services. The government also wants to work with the industry to make it easier to identify households that need extra support and to modernise payment systems. It has backed smart meters and smart pre-pay meters to help households track spending and avoid arrears.

One attendee of the online meeting said there was clearly a lot of ambition behind the government’s plans, and that the minister wanted to get suppliers together with consumer groups to make sure it was delivered. The meeting drew senior leaders from the largest six energy suppliers, plus representatives from trade body Energy UK, fuel poverty charity National Energy Action and five consumer advice groups including Citizens Advice.

Billington said after the meeting that energy debt weighs heavily on millions of families across the country and affects everyone because the costs are passed on to other billpayers. The average household currently pays about £50 a year on its energy bill to service unpaid energy bills across the market, a figure likely to rise without action to shrink the debt pile. The government believes the one-off scheme and new measures could save all households about £130 on average over the next 10 years.

Citizens Advice energy director Gillian Cooper said that with typical annual energy bills predicted to rise again in January, it was essential that the initiative also included protections to stop households falling into debt in the first place. About 40% of unpaid bills are understood to build up during the process of moving home, and the government plans to force landlords to provide meter readings and moving dates to suppliers when tenants move in or out. Rachel Fletcher, a director at Octopus Energy, said she was pleased to see a focus on improving what suppliers do to prevent customers from falling into debt in the first place, and warned nothing in the package should weaken suppliers’ incentive to keep innovating and investing.