Thanks to the overwhelming pressure mounted by campaigners – a group which we were proud to be a part of – the Government finally intervened in the energy cap crisis and announced the cap would be replaced with a new Energy Price Guarantee.
As a result, from 1st October, a typical UK household will pay an average £2,500 a year on their energy bill for the next two years (and households will also benefit from the £400 discount applicable for the next six months). The scheme is expected to save the typical household around £1,000 and protect people from further expected rises over the coming months.
It means bills will be far less than they would have been had the extortionate Ofgem energy cap – which was the focus of our legal action – come into force. Ofgem’s decision would have allowed typical bills to raise 80% from their already high levels to £3,549.
The Government announcement also stated in relation to those households not on standard gas or electricity contracts, “such as those living in park homes or on heat networks – and so outside the scheme – will be no worse off and will receive comparable support through a discretionary fund.” Although the details are uncertain, this helps address one of the main pillars of our challenge.
The Government’s announcement contained far too little detail about how and when this would actually be implemented. And we know bills will still be significantly higher than last year’s. This is an intolerable wait for so many families.
We understand that further details of how these measures will be implemented are to be published next week.
Last week, Fuel Poverty Action and two individuals filed a case against Ofgem in the High Court, with our support, prior to the announcement. We will be monitoring developments closely and will provide a further update on the implications for the ongoing legal action once our lawyers have had a chance to review the scheme in full. In the meantime, the case against Ofgem has been paused as a result of the announcement, until further information is available.
Fuel Poverty Action said: “It’s a shame that this legal case has had to be paused and we hope that in the end it will go ahead. The latest extortionate price cap proposed by Ofgem was just the last nail in a coffin that was built a long time ago. Ofgem has consistently acted for the energy industry, instead of the consumers they’re supposed to be protecting. People are already going hungry and cold, and many will die this winter as a result of energy prices. Fuel Poverty Action is proposing Energy For All, an allocation of energy – free – to cover each household’s basic needs, like heating, cooking, and light. This would be paid for by higher prices for use that goes beyond basic needs, and by windfall taxes and an end to fossil fuel subsidies.”
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