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Ofgem faces legal action over rise in energy price cap

CAMPAIGNERS vowed to sue energy regulator Ofgem today for failing to protect people from energy bills set to rise by a staggering 80 per cent on October 1.

The announcement coincided with the price cap on energy bills rising to an eyewatering £3,549, up 80 per cent on the current limit.

The new cap comes into effect for about 24 million households across Britain on October 1 and is due to rise further on December 31.

It follows the publication of research by the Unite union showing that “rampant corporate profiteering” by supply and distribution networks is fuelling Britain’s soaring energy costs.

The legal action by the Good Law Project (GLP), Fuel Poverty Action and the Highlands and Islands Affordable Homes Warmth Group is the first of its kind in response to the energy bill crisis.

GLP director Jo Maugham said: “Just who and what is Ofgem for? Do not be fooled. This is a choice.

“And the choice they’ve made is to let low-income consumers and small businesses bear the brunt of this crisis.

“We believe Ofgem can and should do more. We intend to put the question before the High Court and will ask for a fast-tracked timeline to reflect the urgency of this crisis.”

The groups will push to ensure that the regulator upholds its legal duty to carry out an impact assessment before confirming the price cap increase, including assessing the disproportionate impact on elderly people, children and people with disabilities.

Unite Investigates said that major energy suppliers, distributors and generators made £15.8 billion in profits in the last year, with the big four suppliers Centrica, E.ON, EDF and Scottish Power reporting an increase of 84 per cent on pre-pandemic gains.

The union’s research found that profiteering throughout the supply chain accounts for at least 30 per cent of the hike in the energy cap over the last year.

Unite general secretary Sharon Graham said: “Rampant corporate profiteering is at the very heart of soaring energy bills and Ofgem’s soaring price cap.”

Labour MP Richard Burgon also linked the increase in consumer energy prices to the excessive profits of North Sea oil and gas companies.

“Yet the government’s windfall tax lets the oil and gas giants off the hook, allowing them to continue making billions in profits on the backs of higher bills for ordinary people,” he said.

“Enough is enough. The government should massively increase the windfall tax so that the oil and gas firms do not make a single penny in excess profits.

“That would raise billions more to help people through this crisis.”

The TUC called the rise a “hammer blow to family budgets” that would push millions of people into fuel poverty.

General secretary Frances O’Grady said: “Ministers must immediately cancel this catastrophic increase.

“This is the worst possible time for the government to go missing in action.

“And to make sure energy remains affordable to everyone, they should bring the energy retail companies into public ownership.”

We Own It lead campaigner Johnbosco Nwogbo said that the government’s obsession with privatisations “continues to cost British energy users,” especially the poorest and the elderly.

He said: “We know that people in countries that have some form of public ownership of energy pay 20-30 per cent less than in countries like the UK that allow private companies to profiteer from our energy.”

Fuel poverty charities have called on the government to urgently extend the household support package announced in May, when the price cap was predicted to reach about £2,800 in October, “to prevent the bleakest of winters.”

National Energy Action chief executive Adam Scorer said: “The scale of harm caused by these price rises needs to sink in.

“A warm home this winter will be pipe dream for millions as they are priced out of a decent and healthy quality of life.

“Households need money in their pockets to weather this storm or we are going to see millions in dangerously cold homes, suffering in misery with unimaginable debt and ill health.”

End Fuel Poverty Coalition co-ordinator Simon Francis said the hike was “like a dagger to the heart of millions of people up and down the country.”

“As a result of the decision, parents will be unable to feed their children, the sick and elderly will be condemned to worsening health, disabled people will go without vital medical equipment and households will be forced into poverty for the first time in generations,” he said.

National Pensioners Convention general secretary Jan Shortt said the rise is “absolutely devastating for most of us” and urged ministers to act quickly to help people make ends meet.

Unison general secretary Christina McAnea called on the government to freeze energy bills, adding:  “This is beyond a disaster for struggling households.

“People can’t even cover basic costs right now, so they’ll be feeling sick at the thought of massive energy bills heading their way.

“After months of inertia, ministers must wake up to the seriousness of the situation.”

Scottish Labour leader Anas Sarwar and Scottish Liberal Democrat leader Alex Cole-Hamilton echoed the call for a price freeze.

Mr Sarwar said: “This is a national emergency and our governments have a moral duty to act.”

Charities and think tanks have warned of a full-blown economic crisis and mental health emergency without government action.

Joseph Rowntree Foundation policy adviser Katie Schmuecker said households are “crying out for certainty and security,” adding: “Millions more will face the threat of bills they simply cannot pay, homes they cannot heat and stomachs they cannot fill.”

And consumer rights expert Martin Lewis warned of a “genuine social and financial catastrophe that is putting lives at risk.”

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