Prime Minister Andy Burnham acknowledged people would find the increase “difficult” but highlighted his move to cut VAT from electricity bills, which he said would help from October.
He said the government would “continue to look… at how we get energy prices down in the long term”.
As well as the VAT cut, the government said the warm homes discount would take £150 off bills for six million households this winter.
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 during the coldest months.
Shadow energy secretary Claire Coutinho said the government must “put cheap energy first”, saying while it had promised to cut bills by £300 they had “gone up by nearly £400 instead”.
Liberal Democrat spokesperson for energy and net zero Pippa Heylings said Burnham needed to “wake up to the scale of the challenge” and make bold changes to lower bills.
Reform UK treasury spokesperson Robert Jenrick said households faced a “difficult period ahead” and said Labour’s “net zero ideology” is driving up bills.
Former Prime Minister Gordon Brown also weighed in, saying the government should introduce a “machine gaming tax” and use proceeds to help those struggling with bills.
Longer term, he said Burnham 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.
He said the gap between gas and electricity bills meant it would be cheaper for households to transition to heat pumps.
Around 35% of households – or 11 million households – are on fixed tariffs, but 22 million in England, Wales and Scotland are on tariffs affected by the price cap.
Ofgem said the price cap will rise by £60 per year – or £5 per month – to £1,723 for the typical household using both electricity and gas and paying by direct debit if this level was sustained for a year.
Kenward told the Today programme the rise was technically 3.6%, but Ofgem always rounds the number which is why it publicised the 4% figure.
Kenward added: “Savings are available by choosing a fixed tariff, which are available at £100 or more below the October price cap.”
The energy cap sets a maximum price for each unit of gas and electricity, not the total bill, so a household’s final bill depends on their usage.
In July, Ofgem reduced what it believes to be a “typical” level of energy use, because many homes have cut back owing to high prices of recent years while energy efficiency has improved.
Its new estimate is 9,500 kWh of gas and 2,500 kWh of electricity a year.
