Tuesday, June 28, 2022

Martin Lewis fumes at Ofgem’s ‘damn shameful’ price cap plan

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Martin Lewis, the money-saving expert, has reacted furiously at energy regulator Ofgem, which he called a “damn disgrace” over proposed price cap changes which he says would give consumers a worse deal while protecting suppliers’ profits.

Mr Lewis tweeted to apologize to Ofgem staff for “losing my rag” on a call to discuss a planned overhaul of price cap rules.

Under new rules being worked out by the regulator, bills could rise and fall four times a year instead of twice as they currently do. But Mr Lewis told Ofgem it had sold consumers “down the river”.

He tweeted: “I lost it when I received a briefing on today’s proposals where it feels like in these desperate times where lives are at risk it has ignored every consumer request at every turn and instead itself hunched over the industry (I hope history proves me wrong).”

Mr Lewis said he feared “serious consequences for consumers” and argued that “we need to do more to do things better than they do”.

The National Energy Action, which works to prevent energy poverty, said the changes could “result in further immense financial burdens”.

Peter Smith. Director of Policy at NE, said: “This change has the overall impact of reducing protections for fuel-poor homes.”

It came as Government Secretary Racheal Maclean provoked anger on Monday by suggesting people struggling with Britain’s livelihood crisis should work more hours or get a better job. Last week Conservative MP Lee Anderson suggested that poor people are using food banks because they don’t know how to cook or have a budget.

The energy price cap rose 54 per cent in April, taking the bill for an average household to £1,971, with another sharp rise expected in October. Energy prices were the main driver of inflation, which is expected to rise to 10 percent this winter, putting pressure on families’ budgets.

On Monday, Ofgem presented proposals to review the cap every three months. However, the first price cap period under the new regime would be calculated using wholesale gas and electricity prices for the past six months, which have reached record highs.

Ofgem said more frequent changes would reflect the most up-to-date energy prices – meaning customers would see the benefit sooner if prices fall.

Mr Lewis also warned that a so-called “market stabilization fee” would consolidate the power of a small group of incumbent utilities.

He added, “I ended the call by asking him to at least consider lowering the standard tariffs, as these huge tariffs discourage people from making real savings by reducing energy use.”

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