The government’s stance is that the increased cost of energy WILL be borne by consumers, and they have refused to bail out the energy companies who are falling like ninepins.
I’m not going to get into a discussion (in this thread) about whether they should bail them out, or whose fault it is that it came to this because it’s not relevant to what’s going to happen next and would make no difference to consumers.
The government are prepared to pay the companies with the bigger pockets (as suppliers of last resort) to take on the customers because they had no option but to do so, thus rebuilding the monopolistic conditions they were so prepared to dismantle by perpetrating the ludicrous situation saying that everyone should switch to reduce their costs.
Secretary of State for Business, Energy and Industrial Strategy, Kwasi Kwarteng’s pathetic attempt at pacifying the masses by saying that we’ll plan for this, and in (a non specified mythical) future and when we all have lots of green generation capability we wont be beholden to global supply and demand and prices will fall was patronising and disingenuous.
Ofgem have said that price regulation needs to be looked at because this crisis has unearthed the flaws in the current pricing regime - that can only mean one thing for the consumer.
The entire thrust of the government (and as a result Martin Lewis’s previous advice) was based on a lie, the whole concept of switching is fatally flawed, it always has been, and it’s precisely what encouraged the setup of so many failed energy suppliers. Looked at on the whole it’s a race to the bottom based on the smoke and mirrors of a supply chain which is subject to forces over which no person (other than a few Saudis and Putin) has any control, least of all governments.
The energy market “calmed” after Putin said he would supply more energy to Europe, it doesn’t take much imagination to realise that was a deeply political move while he had the testicles of European governments in his grip.
So what’s next?
The price cap (if it survives in anything like it’s present form) can only go one way, sharply up. Fuel poverty (as defined by the earlier accepted definition of more than 10% of income being spent on “fuel “ (and which should now be called energy poverty) is going to hit the most vulnerable and elderly hardest, and then it’s going to hit everyone else, even those who thought it would never be a problem.
My prediction is, if price capping continues, it will be likely nearer the £1900 to £2000 mark even if prices fall, because that will offer further protection to the remaining small suppliers wo have survived.
Price capping was originally devised in it’s current guise to prevent energy companies exploiting customers who were switched to a variable tariff. We now need a system which prevents us being exploited by a government who think the market will solve everything. Oh the irony. of it all (not the iron, you won’t be able to afford to do the ironing)
Look on the bright side , it’s one way of moderating CO₂, as huge numbers of people can no longer afford to heat their homes and steel and aluminium and industrial manufacturing is strangled by energy prices. (as it is being in China)
Anti-depressants (cheap ones) free with every energy contract? Now there’s an idea…or better still heavily subsidised insulation… (but not as a result of glued botties on theM25, because that would be seen to be giving in to common sense)