By refusing to implement a proper price cap, the energy regular is proving itself to be spinelessby John Penrose MP / September 5, 2017 / Leave a comment
Whatever you think of the Conservative election campaign, we got one policy offering absolutely right: the energy price cap. We promised to end energy rip-offs for 17 million consumers and it was, unsurprisingly, very popular on the doorstep. So popular, in fact, that it achieved a rare moment of cross-party consensus by cropping up in both the Labour and SNP manifestos too.
Job done then? Well, no because, bizarrely, the energy regulator Ofgem is refusing to implement the cap at all. It says it is too political, that it is worried about legal challenges, and wants parliament to pass a law ordering it to do it first.
Which is pathetic, because the whole point of Ofgem—the reason it was created in the first place—is to protect consumers from being abused by the “Big Six” energy firms. Not only that, but it is explicitly set up to be politically independent, so politicians can’t make grubby deals to intervene on behalf of big businesses, to make sure they don’t go soft on standing up for hard-pressed consumers struggling to pay their energy bills.
Odder still, Ofgem has told me they already have all the legal powers they need to implement a price cap if they want to. So it is asking parliament to pass a law ordering it to do something that parliament has already passed a law giving it the powers to do.
This isn’t just circular, it’s spineless. Because, at the first whiff of gunpowder, these supposedly-fearless champions of consumer rights have turned tail and run for the protection of approval by the very politicians they’re supposed to be independent from. Approval which already appears in three election manifestos which, between them, commanded well over 80 per cent of all the votes cast in June.
Even worse, the cowardice of asking for a special law is a recipe for even more delays while the Big Six carry on ripping us all off. Ofgem knows it will take months or years for a new law to wind its way through parliament, particularly while Brexit negotiations are taking up so much political bandwidth.
But even though the Competition and Markets Authority found a £1.4bn a year detriment to retail energy customers on poor value standard variable tariffs, Ofgem won’t act. It is doing nothing.
“If Ofgem won’t…