Martin Lewis has written to the chancellor to call for April’s planned rise in the energy price guarantee to be scrapped.
The average bill is expected to rise from £2,500 to £3,000 if the cap is amended.
But Mr Lewis, who founded the website MoneySavingExpert.com, has called on Jeremy Hunt to halt the cap increase, saying it is no longer necessary because wholesale energy prices have “come down very substantially”.
He added that increasing the price cap as planned would be a “national act of harm” by the government.
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“It just seems to me there is no need to do this,” Mr Lewis writes.
“If we postpone this rise it is likely from July, wholesale prices will have got to the price cap and if the energy price cap which is set by the regulator and is dictated by wholesale prices, is lower than the energy price guarantee we pay the lower amount, and that is likely to happen from July.
“To put this national act of harm of increasing the price guarantee for just three months, to throw another 1.7 million people into fuel poverty taking it to 8.4 million, it seems unnecessary.”
Mr Lewis called on the chancellor to cancel the proposed increase ahead of the budget in March, suggesting people will have received letters by then telling them their bills are being hiked.
The letter, which was sent on Thursday morning, is supported by charities including Citizens Advice, National Energy Action and StepChange.
Deutsche Bank has suggested the chancellor’s “rabbit out of the hat” – or unexpected announcement – at the budget next month could be the axing of the planned energy cap rise.
Mr Hunt recently insisted that there would be no surprise measures and that instead, the government would remain resolute in rebuilding fiscal discipline and halving inflation this year.
Research produced by the bank this month suggests that the likelihood of ministers keeping the energy price guarantee at £2,500 beyond April “has increased significantly since the start of the year”.
The bank says the fall in gas prices “is a gift the chancellor can’t – and shouldn’t – ignore”.
But the Treasury suggested the April energy price cap rise will go ahead as planned.
“Wholesale prices falling is good news, but as we have all seen, prices are volatile and can increase as fast as they fall,” a spokesperson from the department said.
“If prices return to their late August level, the government would need to borrow an extra £42 billion and potentially increase taxes to continue funding the energy price guarantee at current levels.
“The way the energy price guarantee operates means households will still see lower bills if gas prices continue to fall.
“To support families in the meantime, we are providing millions of vulnerable households with £900 in direct cash payments this year, plus a record increase in the National Minimum Wage, and a 10% uplift in working-age benefits and the state pension.”
Meanwhile, Labour has said they would stop April’s energy price cap rise if they were in office – saving households around £500 on their bills.
When Mr Hunt became chancellor in October, he announced that former prime minister Liz Truss’s original two-year energy price gap guarantee would only last six months – meaning bills would go up again from 1 April 2023.
A leading forecaster has said the fall in wholesale energy costs means average annual bills could soon come in below the level of the government’s energy support programme.
Average annual bills under the regulator Ofgem’s price cap mechanism are expected to drop to around £2,800 a year from July, Cornwall Insight predicted.
This would mean the government’s energy price guarantee, which limits how much a typical household pays for its wholesale energy, would no longer cost the taxpayer anything – potentially saving billions.
Consumers have been warned that bills will remain higher than in 2019, before the pandemic.
The spring budget will take place on 15 March.