Industry responds to Ofgem’s warning of new surge in the price cap

Energy leaders have reflected on predictions that the October price cap will rise to around £2,800

Big Zero Report 2022

Ofgem‘s Chief Executive Jonathan Brearley predicted the cap on household energy bills is to rise to about £2,800 in October.

The increase in the cap would see the average bill increase by more than £800 after the regulator increased it by £693 in April to £1,971.

How does the industry think about Ofgem’s new estimate?

Now is the time for urgent action

Responding to Ofgem’s announcement, Energy Secretary Michael Matheson, Scottish Government’s Cabinet Secretary for Net Zero, Energy and Transport, said: “The confirmation from Ofgem that the price cap is set to rise further in October is not unexpected, but is clearly going to make an already challenging situation for householders much worse.

“Energy price rises are already having a devasting effect on household incomes and there can be no more delay from the UK Government on action on household bills.”

Government intervention now a ‘moral and economic imperative

The Association for Renewable Energy and Clean Technology (REA) has urged the government to take urgent action on energy bills.

It said there is a “moral and economic imperative” for intervention.

Dr Nina Skorupska, Chief Executive of REA, said: “The situation is critical. Already we are seeing people having to skip meals, turn off the heating or struggling to pay for life-saving medical equipment – this devastating energy price cap rise will see millions of households fall deeper into poverty and push many more below the breadline.

“The government has a moral and economic imperative to intervene with a substantial package to relieve pressure on energy bills. VAT on energy bills should be suspended and the Warm Home Discount must be expanded, both in terms of value and eligibility.”

Price cap increase after price cap increase is not the answer

A continued series of price cap increases is not the right answer to tackling the energy price crisis at its root, says the Association for Decentralised Energy (ADE).

Lily Frencham, Chief Executive Officer of the ADE, said: “The energy price crisis we are all facing needs immediate and decisive action, but implementing price cap increase after price cap increase is not the answer.

“What the government needs to do is deliver a clear and implementable plan to lower bills permanently, with a particular focus on clean heat and energy efficiency measures.”

Further rise will make cost of living a catastrophe

GMB Union said that if the energy price cap rises to £2,800, it will turn the cost of living crisis into a catastrophe.

Gary Smith, GMB General Secretary, said: “If Jonathan Brearley is right, this whopping increase in the energy price cap will turn a cost of living crisis into a catastrophe for low-paid workers.

“Millions of carers, school staff, NHS employees, retail workers and more will be plunged into fuel poverty.”

“Financial, social and health impacts are unthinkable”

Adam Scorer, Chief Executive of National Energy Action, said: “Ofgem’s warning that the price cap will rise again by over £800 in October will strike terror into the hearts of millions of people, already unable to heat and power their homes.

“It will plunge households into deep, deep crisis. The financial, social and health impacts are unthinkable.”

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