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Wednesday, December 1, 2021

The energy price cap was a catastrophic Tory error

Desperate to appeal to working-class voters and see off the perceived threat of a Jeremy Corbyn-led opposition, ministers stole a flagship Labour policy that Boris Johnson himself dismissed as meddling jiggery-pokery and claimed it as their own.

Government and the regulator Ofgem are sticking doggedly to the mantra that the price cap has helped to keep costs down for millions of households, which is true but only up to a point. 

It has been raised twice in the space of a year anyway, and is set for its sharpest rise yet in April, possibly adding another £500 to bills in one fell swoop. 

The bailout bill risks wiping out any savings anyway. In forcing better-capitalised companies to take on the customers of those that have gone bust, bills have to go up eventually, so it’s totally self-defeating. 

The industry estimates the total cost so far to be in the region of £4bn to £5bn. In the meantime, the direct cost to the taxpayer of propping up Bulb alone is expected to be a staggering £1.7bn.

Mansfield-based Entice Energy and London supplier Orbit Energy both went under on Thursday, bringing the total number of failures since the summer to almost 30.

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