The average household’s energy bill will rise to the highest level in three years following Ofgem’s new price cap announcement. (Alamy)

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The energy regulator said the cap, which determines the maximum amount that a supplier can charge a consumer for energy per year, would rise by 4 per cent from £1,663 to £1,723 between October and December. Energy analysts Cornwall Insights have also predicted that the cap will reach around £1,872.15 in January-March.

Energy Secretary Miatta Fahnbulleh said “families will be understandably concerned” about the cost of energy “which is being driven up by the Iran war”. 

“Energy is an everyday essential, and it needs to be affordable for everyone, which is why we have cut VAT on electricity bills from October to give families some breathing space,” she said.

“This has limited the rise in the price cap and follows the £150 in costs we removed from bills earlier this year, and we will keep looking at what more we can do to protect families from unaffordable bills.” 

Prime Minister Andy Burnham announced a cut to VAT on household energy bills when he entered No 10 in July. The step, which was part of a wider cost-of-living package, was projected to remove around £45 a year from the average household bill. 

However, the savings face being swallowed by higher prices, raising questions of what more the Labour government can do to support households with their bills.

Why are energy bills increasing? 

Energy prices had started to stabilise following their 2022 peak triggered by Russia’s invasion of Ukraine. Around half of Europe’s natural gas came from Russia, meaning a breakdown in relations with Moscow led to a sharp fall in supply and a steep rise in global prices.

However, the decision by the US and Israel to attack Iran at the start of this year and resulting conflict has led to further disruption in the international energy markets.

Around 20 per cent of the world’s natural gas passes through the Strait of Hormuz, a vital shipping lane controlled by Iran and which Tehran has effectively shut down as a way of putting pressure on the Donald Trump administration. Iran is also responsible for a large portion of the world’s oil supply.

Responding to the cap rise announcement on Wednesday, Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “What is frustrating is these rises, as we have seen time and again, have very little to do with what is happening in Britain.”

What further action could the government take?

The Budget on 28 October will be a key event for the question of further support.

In terms of what steps Chancellor John Healey might take in his first fiscal event since entering the Treasury, PoliticsHome understands he could roll out plans developed by the Keir Starmer government to expand eligibility for the Warm Homes Discount.

The Warm Homes Discount was introduced in 2011 by the coalition government to help low-income households with energy bills during the winter months through a one-off £150 annual discount.

PoliticsHome understands that it could be expanded to include more households facing cost-of-living pressures, such as recipients of Personal Independent Payments, and described as ‘Warm Homes Plus’.

The End Fuel Poverty coalition told PoliticsHome that while an expansion of the Warm Homes Discount would be welcome, the £150 discount is now worth significantly less than when it was introduced over a decade ago due to energy bill inflation. It is now estimated to cover 9 per cent of the average bill, compared with 14 per cent when it was first rolled out.

PoliticsHome also understands the government has shown interest in a Resolution Foundation idea to use HMRC data to target support at households earning below a certain threshold. The think tank has said that the scheme would provide an additional £175 to eligible households on average a year, costing the government £2bn.

Adam Berman, director of policy and advocacy at Energy UK, told PoliticsHome that “too many households continue to struggle with high energy bills” in the UK.

He added: “It’s imperative that the government introduces more targeted support for low-income households alongside bringing down electricity bills for everyone.”

With the first Budget of the Burnham government two months away, and the next price cap period not until early next year, further action on energy bills is not expected until after 28 October, when households will be preparing for the coldest period of the year.

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The MP for South Derbyshire, Samantha Niblett, said she wanted to shift the Overton window – a term which means ideas being accepted as mainstream – so that talking about consent, intimacy and pleasure is entirely normalised.

Speaking on the latest episode of PoliticsHome podcast The Rundown, which will be published on Friday (28 August), Niblett said she hopes her campaign for lifelong sex education will help her MP colleagues feel more comfortable talking about the subject in the House of Commons.

“I have spoken to male MPs who are really supportive, but who are really scared about talking about it when it comes to the debate in the chamber, because they don’t want to be known as the ‘pervy male MP’, and that’s part of the problem,” Niblett said.

“But you know how we see the Overton window shift what we think of as normal in politics, I kind of want to be doing the same thing with sex. So, the more I talk about it, the more it’ll be boring, and when it’s boring, then won’t that be great?”

The Labour MP faced criticism, some of it from MPs in her own party, when in an interview with PoliticsHome earlier this year she announced her campaign to overhaul sex education in Britain.

Niblett said a more “inclusive” approach would encourage people to talk about sexual pleasure without feeling “ashamed”, as well as help people better understand consent, prevent abuse and violence, and raise awareness of how childbirth, the menopause, stress and other health conditions can impact sexual satisfaction.

She hosted a campaign launch party at a rooftop bar in London last month, where she told PoliticsHome that some MPs were “on a journey” to supporting it.

Speaking on the podcast, Niblett said the negative responses and becoming known as the “sex MP” have not put her off: “I am happy to take it on. I’m a belligerent swine.”

However, she admitted that some of the criticism had affected her, including a recent article which asked if she was “the most ridiculous MP in Britain”. “I am only human. Of course, there are going to be some times where it’s knocking me down,” she said.

“But that’s also why it’s absolutely delightful when I have Thames Valley Police reach out to me to say, thank you so much for your campaign. When I have spoken to the first-ever occupational therapist to work in a sexual health clinic in a hospital, saying, brilliant, thanks for your campaign’.

“I feel I’m justified in the work that I am doing, but I don’t think I will be alone for long.

“I think there will be more and more MPs who feel that they can talk about it, and then we can share the load.”

The Labour backbencher has secured a debate in Parliament on the topic in the autumn, and is currently working on a briefing for her MP colleagues about her campaign, which hopes to normalise conversations about sex that politicians usually shy away.

“If we start to normalise it, then it’s going to hopefully make it easier for some of my colleagues,” she said.

“I know there are loads of them that feel the same. They’re just a bit uncomfortable about getting the conversation started because they are nervous about the pushback, because they are nervous about the single clips for headlines.”

The Rundown is presented by Alain Tolhurst, and is produced and edited by Lulu Goad and Ewan Cameron for Podot

• Click here to listen to the latest episode of The Rundown, or search for ‘PoliticsHome’ wherever you get your podcasts.

Shadow secretary for local government James Cleverly (Alamy)

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Leaders of Tory-run Wandsworth and members of Kemi Badenoch’s shadow front bench, including party chairman Kevin Hollinrake and shadow local government secretary James Cleverly, met on Wednesday to discuss how to escalate their response to the new local government funding settlement.

They agreed on what sources described as statutory action, in which Wandsworth Council will consult residents before submitting a formal appeal to ministers asking them to reconsider the funding reforms. If this appeal is rejected, then the Local Government Association could make its own appeal to ministers on behalf of the council. 

Wandsworth Conservatives told PoliticsHome: “The previous Labour administration in Wandsworth failed to stand up for local residents, choosing instead to roll over while the Labour government cut 40 per cent of Wandsworth’s funding. That decision has real consequences for our borough and unfairly punishes Wandsworth residents.

“Wandsworth Conservatives will always stand up for our residents. That is why we have officially launched a challenge to the decision taken by the Labour government.

“We will not sit back and accept a funding settlement that leaves Wandsworth residents worse off. We will continue to fight for a fair deal for our borough and the funding it deserves.”

PoliticsHome revealed last week that Wandsworth was preparing to introduce England’s biggest-ever council tax increase in April 2027.

The council, which has one of the lowest tax rates in the country, blamed Labour government cuts to its grant funding, which are projected to amount to a 40 per cent reduction.

The government has said its reforms to local government funding prioritise parts of the country with higher deprivation so that the system is “truly based on need”.

However, the changes will mean less funding for some local authorities in London, with MPs and councillors in the capital warning that the plans will exacerbate cost pressures.

London Councils, which represents local government in the capital, last week told PoliticsHome “it is now almost impossible” for councillors in London “to protect frontline services for their communities” because “funding from central government remains wholly insufficient to meet these growing demands”.

Wandsworth, which the Conservatives won from Labour in May, has already announced spending cuts in response to the new funding settlement, having previously warned that council tax would have to increase by up to 230 per cent without a spending decrease.

Leaders of other councils impacted by funding cuts were also present on Wednesday. Conservative-run Westminster and Kensington & Chelsea have been considering launching appeals to the government, as has Lib-Dem-controlled Richmond, PoliticsHome understands.

Westminster, which like Wandsworth was permitted by the government to raise council tax above five per cent without a referendum for the next two years to raise more revenue, recently warned it would have to raise council tax by up to 200 per cent to keep spending at current levels.

A Conservative Party spokesman told PoliticsHome: “We regularly meet with Conservative council leaders across the country to discuss the issues facing their communities.

“Labour have slashed funding for these councils only to hand the money to badly run Labour councils elsewhere.

“It is only right that, in the face of this Labour government’s determination to impose huge and vindictive council tax rises, we meet with them to discuss how we can work together to oppose Labour’s council tax raid.”

Since PoliticsHome revealed the expected council tax rise, the Labour group in Wandsworth has used the 160 per cent figure on its campaigning literature ahead of a by-election in the Trinity ward on Thursday. 

In response, Conservatives in the South London borough have accused the previous Labour administration of spending recklessly while it controlled the council.