Double digit energy price cap hike a serious backward step – Carmichael

Orkney and Shetland MP, Alistair Carmichael, has warned that Ofgem’s announcement today of a 10% increase in the energy price cap in October represented a “serious backward step” for struggling families. A “typical” household’s annual energy bill will rise by £149 in October under the new price cap, but this is likely to be significantly higher for families with greater energy needs due to climate or poor insulation.

People using an average amount of gas and electricity will pay £1,717 a year, a 10% rise compared with now, though this does not account for homes off the gas grid such as those in the isles. Although prices are still lower than last winter, the rise in bills comes as some support for bills has been withdrawn, and restrictions on pensioner access to the Winter Fuel Payment.

Energy regulator Ofgem stated that the rise in the price cap is the result of higher prices on the international energy market owing to increasing geopolitical tensions and extreme weather driving competition and demand for gas, which determines the price of wholesale electricity.

Mr Carmichael said:

“This double-digit hike in energy prices will be a hard hit for families in the isles. Combined with the new restrictions on access to the Winter Fuel Payment it represents a serious backward step as we come to the end of the summer. It is past a cliché now to note that this price “cap” has become entirely meaningless with the way it yo-yos up and down with each revision, especially given that energy bills are already more than 50% higher than they were pre-pandemic.

“All that is without mentioning that the price cap average means little in places with far higher energy requirements than the regulator’s “average”. Sooner or later – and ideally sooner – the government is going to have to think about proper reform of the energy market, with accountability and transparency, and consideration of the case for a geographic tariff for places like the isles with high fuel poverty.  

“This should be a wake up call for both of our governments that fuel poverty will not disappear of its own accord. We need to see focused effort to tackle fuel poverty now and in the years to come, to improve housing and insulation and get help to those in the most need. 

“As always, anyone in the isles in need of help with energy bills, accessing support payments or dealing with their supplier can contact my office for support.”