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Millions Of UK Households Face 70% Rise In Energy Bills

by Emily Gosden
December 10, 2021, 11:00 AM
in News and Opinion
Reading Time: 2 mins read
A A
1

boris johnsonEnergy bills could rise to almost £1,900 ($2,524) a year from April as supplier collapses, caused by a decade of regulatory failings, add to the pain of record wholesale prices, a damning report warns.

Citizens Advice accuses Ofgem of a “catalog of errors” that will mean households face paying an extra £94 a year on their energy bills from April to foot the £2.6 billion of costs from a wave of supplier failures over the past four months.

It says this increase will come “on top of an expected increase in the price cap of between £400 and £520 in the same period”, after unprecedented rises in wholesale gas and power costs.

The price cap for 11 million households on standard tariffs has already risen to £1,277 a year from October but the report implies an increase of as much as £614, or 48 percent, taking typical bills to as much as £1,891 when the cap is next updated in April.

Citizens Advice says that Ofgem “failed to act against unfit energy suppliers for nearly a decade” despite repeated warnings from the influential charity and many others.

“Ofgem allowed unfit and unsustainable energy companies to trade with little penalty. Despite knowing about widespread problems in the market, it failed to take meaningful action,” it said.

Rules designed to ensure suppliers were fit to trade “came too late and didn’t go far enough” while the rules that did exist were not enforced.

As a result, the regulator left the market in a “precarious position” when gas prices surged this year, precipitating the collapse of 26 companies supplying almost four million households since August.

Analysis by consultancy BFY for Citizens Advice estimates the costs arising from 25 of these failures already stand at £2.6 billion that consumers will pay on their energy bills from April.

That excludes the costs associated with the collapse of Bulb, Britain’s seventh-biggest supplier with 1.6 million households, which is being dealt with through government-backed special administration and has already required a £1.7 billion taxpayer loan.

The charity calls for an independent review of the causes of the market collapse and action by the government and Ofgem to “protect consumers from unnecessarily steep increases to bills to pay for supplier failures.”

Read rest at The Times

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