by Angus O'Brien Feb 7th, 2022
Ofgem just added £693 to the energy bills of millions. Then, less than 24 hours later, they quietly announced a rewrite of the energy price cap rules – in full defiance of overwhelming public opposition.
It’s more bad news for consumers, and could dial up the pressure on Rishi Sunak’s already creaking support package.
Higher bills, more often
After launching a consultation late last year, almost 40,000 members of the public wrote to Ofgem opposing plans which could see consumer bills rise higher and more frequently.
39,260 members of the public from all across the UK expressed their views on Ofgem’s proposal. Their opposition was unequivocal:
Thousands and thousands of people from the 38 Degrees community also shared comments and harrowing stories detailing the toll rising bills has already taken on families and households across the country.
We were disappointed to see, with consumers reeling from yesterday’s announcement, the market regulator quietly published the outcome. It’s pushing ahead despite enormous public pushback.
Overwhelming public opposition
The news has been dominated by the latest price cap update, set to rise 54% from 1 April. But, for millions, it doesn’t change the question they’re already asking: how are we expected to pay?
Recent polling by Survation, commissioned by 38 Degrees, revealed that 61% of people are already paying more for their energy bills than they did last year. And, in response to rising bills, 1 in 5 people reported that they were falling behind on other bills, borrowing money and skipping meals.
Karen, who lives in East Yorkshire and has worked as a nurse throughout the pandemic told us: “I’m so worried about being able to pay my electric bill that I only put my heating on when absolutely necessary. Still my bill exceeds £2,000.”
And Dominy, a mother of 3 from Huddersfield, said that her energy bills have already gone up to £161. Despite working from home, she doesn’t want to turn the heating on during the days so instead, she says, “I sit there with big jumpers, I even put my dressing gown on… it’s freezing.”
With bills set to rise even further in April, these stories will only become more prevalent. Not that polling is necessarily required to highlight the impact of an additional £693 on household energy bills, but 70% of people in the UK stated it’ll mean they have to ration their heating. 1 in 3 said they’ll skip meals and 29% said they’ll fall behind on other bills.
So, what’s being done about it?
Government must take responsibility
The market regulator, Ofgem, may be a key player in this crisis but, ultimately, responsibility lies with the Government.
The 38 Degrees community will continue to hold Ofgem to account. Ofgem say they exist to “protect energy consumers”, yet they’re pushing ahead with plans consumers opposed in their tens of thousands.
But effective action to tackle this cost of living crisis must come from the Chancellor, Rishi Sunak. The centrepiece of his new support package is not a rebate, as the Chancellor claims, but are instead loans – £200 given to your energy company to temporarily reduce your bill. You then have to pay it all back over the next few years. It’s not even close to being enough.
A windfall for Shell
Our polling showed that 63% of the public support a windfall tax on the profits of energy giants, like BP and Shell, which have been raking in billions through this crisis. And that was before the price cap rose – and Shell announced £14.1 billion in profits last year.
Our bills don’t just disappear. Energy giants are profiting at record rates. It’s unjustifiable to say they shouldn’t be taxed to fund proper, comprehensive support for households dealing with spiralling bills and an investment in a green retrofit of our homes.
To insulate against the cold and price rises, it’s clear what Rishi Sunak must do.