Energy prices will rise for millions of people across the UK in October, right at the start of the cold weather. Regulator Ofgem said the price cap for default domestic energy deals would be raised to cover suppliers’ extra costs. The typical gas and electricity customer is likely to see their bill go up by £139 to £1,277 a year. Charities warned the timing would hit struggling families hard, who already face losing an extra £20 a week from Universal Credit in October. Prepayment customers will see an increase of £153, from £1,156 to £1309, the regulator said.
BBC 6th Aug 2021 read more »
Energy prices for 15m Britons are expected to rocket from October after the energy regulator said it would increase its cap on the most widely used tariffs by around 12pc, mainly due to soaring wholesale energy prices. The cap for average annual consumption on the standard tariffs, used by around 11m households, will rise by £139 to £1,277, while for some 4m homes on pre-payment energy meters it will rise by £153 pounds to £1,309, Ofgem said, representing a 13pc rise. The regulator said that affected households would ultimately save between £75 and £100. The increase has been driven by a rise of more than 50% in energy costs over the last six months, with gas prices hitting a record high as inflation jumped amid the easing of pandemic restrictions, Ofgem said.
Telegraph 6th Aug 2021 read more »
Energy bills for 15 million households will rise by at least 12 per cent from October as the price cap is increased because of record-high gas costs. Ofgem said that 11 million households on standard tariffs faced an increase of £139 a year or 12 per cent while a further four million households with prepayment meters would see an increase of £153 a year or 13 per cent. The increase ranks as the biggest rise in energy bills in a decade and consumer groups warned it would spell hardship for many families as it coincided with the end of the government’s universal credit increase and the furlough scheme. Suppliers will be able to increase bills for customers on default tariffs to an average of £1,277 a year, while annual costs for a typical prepayment meter customer will rise to £1,309. The energy regulator said the increase was “driven by a rise of over 50 per cent in energy costs over the last six months with gas prices hitting a record high as the world emerges from lockdown”.
Times 6th Aug 2021 read more »
Back in 2013 Ed Miliband proposed a 17-month energy price freeze. David Cameron suggested it was Marxist and a gimmick. Boris Johnson called it meddling jiggery-pokery. Yet in 2017 the Conservative election manifesto promised an energy tariff cap. It was introduced in 2019 until 2023 at the latest. And now a reportedly free-market Conservative secretary of state is proposing to extend its life. How can this be? The answer is that in 2016 the Competition and Markets Authority (CMA) claimed excess profits and inefficient costs in the energy market cost customers £1.4bn per year on average, and £2bn in 2015. Ofgem and the CMA itself advised against a tariff cap. But the £2bn “detriment” featured heavily in the 2017 election, and a tariff cap was unavoidable. The CMA calculation was quite simply a mistake. The CMA compared actual costs against “a hypothetical construct” that was essentially “an idealised perfectly competitive market” with unrealistic costs. This was inconsistent with conventional economic analysis, with previous competition authority practice, and with the CMA’s own guidelines. So there is not, and never was, a detriment of £1.4bn to £2bn a year. Consequently, the tariff cap is simply a mistake.
Telegraph 6th Aug 2021 read more »