Energy Secretary Miatta Fahnbulleh said the removal of VAT on energy bills for six months from October was a “down payment” on helping households with energy costs.
She said bills would be £45 less than they would have been and the warm homes discount would take £150 off bills for six million households this winter.
“We know people are under huge amounts of pressure due to the cost of living, and I know that people are really worried about their energy bills, and we are absolutely alongside them and trying to do everything we can,” she told BBC’s Today programme.
But analysts at the energy consultancy Cornwall Insight have forecast domestic energy prices may rise a further 9% in the new year, bringing renewed concern to households at the coldest time of the year.
Shadow energy secretary Claire Coutinho said the government had to “put cheap energy first”.
“Labour promised to cut energy bills by £300, but they have gone up by nearly £400 instead,” she said.
Liberal Democrat spokesperson for energy and net zero Pippa Heylings said: “The prime minister must wake up to the scale of the challenge and accept that bold change is needed to bring bills down.”
Former Prime Minister Gordon Brown also weighed into the issue, saying the government should introduce a “machine gaming tax” and use the proceeds to help those struggling with energy bills.
Longer term, he said the government should look at a social tariff for energy.
“I think Andy Burnham, I know him well, will want to do something along the lines I’m suggesting”, he said.
Neil Kenward, Ofgem’s director general for markets, said while gas bills were rising by 8%, electricity bills were actually falling slightly due to the government’s VAT cut.
“So we are now seeing for the second price cap in a row a bit of a gap open up between gas bills and electricity bills, and that in a sense is positive because it means the transition for example to heat pumps becomes cheaper for households,” he told BBC’s Today programme.
