Martin Lewis: energy price guarantee letter to Jeremy Hunt explained - what has he warned of if EPG is raised?

Martin Lewis said postponing the energy price cap increase is a “practical and fair decision”
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Martin Lewis has called upon Jeremy Hunt to postpone April’s planned rise of the energy price guarantee, saying that the decision will “damage people’s pockets and health”.

The average bill is expected to rise from £2,500 to £3,000 in April, when government support becomes more targeted. However Lewis, the founder of MoneySavingExpert.com, has written a letter to the Chancellor urging him to row back on plans announced last year.

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He said the proposal to increase prices was made when wholesale prices were "looking to be higher than they are now”, adding that increasing the price cap as planned would make "the damage to people’s pockets and mental health of another round of energy price rise letters is disproportionate".

On Twitter, Lewis published the letter that he had sent to the Chancellor to his 2.1 million followers, which has been backed by major charities. He wrote: "Postponing the increase is a practical and fair decision, with household energy bills already double what they were the prior winter."

Martin Lewis is urging all mobile phone users to check their contracts (Photo: ITV)Martin Lewis is urging all mobile phone users to check their contracts (Photo: ITV)
Martin Lewis is urging all mobile phone users to check their contracts (Photo: ITV)

He added: "Without intervention, and soon, the charity National Energy Action predicts that the number of fuel poor households will rise drastically from an already shocking 6.7 million to 8.4 million from April – approaching double the 4.5 million households in this position in October 2021." Lewis called this a ‘frightening’ statistic.

Pushing back the looming 20% hike to the energy price guarantee (EPG) from April would be both “practical and fair” and help people survive until bills begin to come down later in the year, Mr Lewis wrote.

Chancellor of the Exchequer Jeremy Hunt, leaves Downing Street, Westminster, London, following the first Cabinet meeting with Rishi Sunak as Prime Minister.Chancellor of the Exchequer Jeremy Hunt, leaves Downing Street, Westminster, London, following the first Cabinet meeting with Rishi Sunak as Prime Minister.
Chancellor of the Exchequer Jeremy Hunt, leaves Downing Street, Westminster, London, following the first Cabinet meeting with Rishi Sunak as Prime Minister.
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In November the Chancellor announced the cap would be increased to £3,000 for the average household, but Lewis stated this was no longer necessary.

The letter continued: "In your November Autumn Statement you announced a 20% increase of the energy price guarantee (EPG) - the state-subsidised energy rate - from April. This will increase energy bills yet again for almost every home across England, Scotland and Wales. This comes at the same time that the £400 energy bills support scheme comes to an end.

Lewis also provided some supplementary information, where he said: "Importantly if Ofgem’s regulated energy price cap falls below the energy price guarantee (EPG), consumers will pay the lower of the two.

"If this is the energy price cap, then the government support will no longer be needed on top. With current forecasts (see below), the EPG should likely be replaced by the price cap by July."

He broke down the latest predictions for the Ofgem price cap from Cornwall Insight, in a comparison from the Autumn Statement to now - which were £800 higher.

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