When dozens of energy companies started going bust in 2021, the government knew it had a crisis on its hands. The rise of the energy price cap from £1,277 to £1,971 in April – an increase of nearly £700 – led to not one but two emergency support packages. By the end, £15 billion worth of subsidies and support broadly covered the price rise for Britain’s eight million poorest households. This, it now seems, is just the start of what’s needed to get them through winter.
Starting in January, the price cap will be updated every three months instead of every six months to better reflect the wholesale price of energy
This morning, Ofgem has announced the cap will rise from £1,971 to £3,549: an 80 per cent increase. This exceeds the roughly £1,200 of support the poorest are already receiving and raises two questions: just how much higher might the price cap rise this winter and what will the government’s strategy be to provide relief?
Boris Johnson has made clear that the second question is one for his successor, which will make these next ten days before the new leader is announced deeply uncomfortable.
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