Consumers facing 'fiscal punch in the face' with energy price cap increase

Mr Lewis also told MPs about the “worrying issues” of companies disproportionately increasing customers' direct debits, calling on the regulator to “crack down” on the actions.

The comments come just days before the scheduled 54 per cent increase in the energy pricve cap, which will see average bills climb by around £700 a year.

Speaking to the Business, Energy and Industrial Strategy committee this morning, the finance journalist said: “About a year ago, for somebody on typical use [...] you would have been paying £800 on the cheapest fixed.

“Right now, there’s nothing cheaper than the price cap currently which for somebody with typical use is £1,277 .

“On April 1, people are going to feel a fiscal punch in the face when that goes up for someone on typical use to £1,971, that’s a £700 rise.”

There have been calls for more intervention from Government to reduce the pressure on families struggling to pay their bills as the cost of living increases.

Meanwhile, Mr Lewis says firms are playing “fast and loose”, trying to disproportionately increase the prices their customers are paying each month.

He told the Committee: “There is no reason to double someone’s direct debit when they’re in credit and the price cap is going up 54%.

“That’s not mathematically sound and it’s a breach of licence conditions. I have been very concerned that a number of companies are doing it to improve their cash flow situation at the expense of their customers and I would like to see the regulator crack down on that quite substantially.”

Asked to give examples of firms doing this, Mr Lewis replied: “Anyone with an energy licence. This is a market-wide system.

“Companies are seeing this price change as an opportunity to crystallise a change in payments.

“It’s right across the board with all companies. Consumers have to be wary.

“The amount of playing fast and loose that seems to be going on is huge right now. We need to crack down and we need to be much tougher with firms that do this.”