MPs have called on Ofgem to tap network companies’ £4 billion windfall to fund a major new energy debt relief scheme, as record levels of household energy debt push millions further into hardship.

The recommendation is part of the energy security and net zero select committee’s Cost of Energy report, published today, which warns that “there is no shortage of money in the wider energy system” even as households face soaring bills.

The report found that consumer energy debt has reached over £4bn, more than triple from five years ago, and that standing charges amount to a “regressive tax on energy access.”

It also criticised the “toothless” energy ombudsman, calling for it to be placed on a statutory footing, and highlighted that a sluggish and unreliable smart meter rollout has left millions facing billing errors and limited access.

Average energy debt for customers without repayment plans has doubled since 2021, hitting £1,712 at the start of this year.

MPs said it was “completely inexcusable” that people are being forced to choose between heating and eating while energy networks enjoy excess profits of £4.15bn from outperforming price controls.

The committee urged Ofgem to create a permanent Energy Debt Relief Scheme by spring 2026, including provisions for debt forgiveness, and to set the price cap equally for all customers regardless of payment method.

It also called on the government to set new smart meter targets by the end of the year, focused on reliability rather than installation numbers.

Committee chairman Bill Esterson MP said: “British energy consumers are £4bn in debt, while network companies have made over £4bn in excess profits.

“We’re calling on the government to use these windfall profits to fund a lasting energy debt relief scheme.”

End Fuel Poverty Coalition co-ordinator Simon Francis said the report “should mark a turning point in the fight to end the energy cost crisis,” welcoming the call for debt relief funded by excess profits as “landmark recommendations.”

“Our energy system has been stacked against people struggling to heat their homes and urgent change is needed,” he said.

Mr Francis added that “warm homes must be treated as a public health priority,” urging the government’s forthcoming Warm Homes Plan to deliver a £13.2bn programme to support the lowest-income households.

The government was approached for comment.