The Tories’ price cap that was supposed to cut energy bills has led to price rises.
It couldn’t be clearer that democratic public ownership of the energy firms is urgently needed.
People across Britain have seen a combined £1.2 billion added to energy bills, new research has found. This is thanks to 42 price rises in the six months since the government’s flagship price cap was supposed to end rip-off bills.
During the same period last year there were just 15 price rises and, despite wholesale gas and electricity prices falling, the average increase is higher than 2018, according to auto-switching business Look After My Bills.
So far in 2019 the average price rise is £110 compared with £75 last year, with many suppliers cashing in since the price cap was introduced in January, new data suggests.
Lily Green, head of research at Look After My Bills, said, “The sheer number and scale of price rises this year raises serious questions about the unintended consequences of the price cap.
“It’s too early to tell but it’s possible that in a perverse twist of fate—the price cap may have opened the door to price rises” she said.
“Too many suppliers are seeing the cap as a target and taking the opportunity to push prices up.
“What is particularly baffling is that wholesale energy costs are in fact going down. You would expect energy bills to do the same.”
The Big Six suppliers—British Gas, Eon, Scottish Power, SSE, EDF and Npower—all increased prices but the worst offenders were smaller providers Ebico and Tonik, with average rises to bills of £162 and £144 respectively.
In January, the government’s price cap was introduced which meant suppliers could only charge up to £1,137 for average usage in a typical home for customers on a standard variable tariff (SVT).
The cap was raised in April to £1,254 following increases in wholesale prices.
The Big Six announced they would raise their SVTs accordingly to the highest possible limit.
Shareholders in the entirety of the privatised rail, telecoms, energy, mail and water companies have grabbed over £40 billion since 2010.
That money could have gone into investment in these public services in order to expand and improve them or keep their charges down.
Around three-quarters of people back renationalising energy. Opinion polls show that public ownership is popular because it means services can be run for those who use them and work in them, not for profit.
And only a democratically-run and socially controlled energy system will make the huge changes needed to avoid climate chaos.
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