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Energy cap 'not enough' to tackle fuel poverty

OFGEM’S mooted £1,136 energy bill cap for “typical usage” does not go far enough to help the most vulnerable, campaigners warned today.

The energy regulator said the “tough cap” will result in 11 million households on default deals saving about £75 a year on average, although the amount households save will depend on their usage and supplier.

Shadow business, energy and industrial strategy secretary Rebecca Long Bailey pointed out that PM Theresa May had promised that 17 million households would be “better off by up to £100.”

And she said the Big Six have sent energy prices rocketing while the government “dithered” over a cap, meaning millions of customers “will be even worse off than when May first made her promise.”

A Fuel Poverty Action spokeswoman told the Star that the cap is “worth less than expected due to the rising cost of fossil fuels.”

She said: “It does not cap the total bill — people who need a lot of heat because of age, illness or disability, or because their home is draughty and poorly insulated, will still pay much more than the average £1,136 — or go cold. 

“A cap is essential to stop the profiteering but people will still die from fuel poverty until we get well-insulated homes and switch over to renewable energy. 

“Energy from the sun, wind and tides can be genuinely affordable.”

She said that the campaign supports energy being brought under public control but that “it’s no longer so simple as renationalisation.”

Another group, National Energy Action, also argues that people experiencing extreme fuel poverty will need more than what is currently being proposed by Ofgem.

Chief executive Adam Scorer said: “The cap is designed to benefit around 11 million standard variable tariff (SVT) customers who don’t, or can’t, engage in the market.

“They have paid a ‘loyalty premium’ for years and Ofgem is right to tackle it head-on.

“But, while fuel poor households on SVTs will benefit, there are important questions that need to be addressed in the consultation about whether the inclusion of new policy costs in the future may mean some low-income households could get a worse deal.

“Many fuel-poor households are more than £1,000 short of being able to afford a warm, dry and healthy home.”

Ofgem, which was given powers by the government in July to introduce the cap, hopes to have it in place by the end of December.

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