This Friday, we will get a good idea of the pain coming our way when the egregiously inept regulator Ofgem sets the new energy price cap that kicks in from October.
For sure, it’s going to put a dampener on the long Bank Holiday weekend (despite the weather forecast looking promising).
Although every household’s usage is different, it is likely that average energy bills will increase by more than 170 per cent compared to last year. The typical monthly energy direct debit, says comparison website The Energy Shop, will jump from £106 to £292.
Head-to-head: The next Prime Minister, whether it is Liz Truss or Rishi Sunak, must show us they feel our financial pain
‘Fuel poverty’ will become the norm, not the exception, with 18million households seeing at least 10 per cent of their income absorbed by energy bills.
Many people, especially the elderly, low-income households and single parents, will not be able to afford the higher payments.
Indeed, a retired friend told me last week that she had already been in touch with her supplier, telling it there is no way she will be able to pay the latest direct debit payment – and that’s before the new price cap even kicks in. Benefit dependent, she will pay what she can when she can.
I imagine she will not be alone. Worryingly, this is just the unpalatable hors d’oeuvre. Worse will come in the New Year when Ofgem implements yet another increase.
If energy experts are right, we could then see average annual energy bills push up to £4,200, compared to the current £1,971.
As I said last week, and I have no shame in repeating, we need the Government to come up with a plan that will protect most of us from the financial impact of grossly swollen energy bills.
While Labour’s proposal to freeze the price cap at its current level until next March is riddled with holes, it is at least a policy. Of course, in opposition, it’s easy to make grand statements, but Labour’s plan puts the Government firmly on the back foot.
So, by the time Liz Truss gets anointed Prime Minister two weeks tomorrow, I hope she has fleshed out her plans for tackling the energy crisis. Cutting green energy levies – saving households on average £150 a year – is all fine and good, but she urgently needs to come up with more to convince the electorate that she feels their financial pain.
A beefing-up of the bills rebate scheme – currently worth £400 per household – should be a priority.
FCA’s shortcomings exposed
Although my love of the BBC is now primarily confined to The Archers (love you Peggy Archer) and morning forays into the Today programme, the corporation sometimes comes up with a triumph.
Last week’s Panorama programme was a case in point as it examined events surrounding the collapse in 2020 of property investment scheme Blackmore Bond, resulting in 2,000 investors losing £46million.
In the programme’s sights was the Financial Conduct Authority (FCA) which was accused of failing to act promptly on intelligence it had received about the scheme, three years before Blackmore imploded.
Some of you were quick to opine on the programme and its conclusions.
‘The FCA is as useful as a chocolate fire guard,’ said Edward Browne who is never short of an opinion or three (but always spot on). John Rowlands, from Lichfield in Staffordshire, was equally forthright.
He was a victim of the Woodford Equity Income fund meltdown more than three years ago and, like thousands of other investors, has been waiting patiently for the FCA to publish its report into events surrounding the fund’s demise.
‘Damning evidence against the FCA,’ he said of the programme. ‘Go on Jeff, give the FCA hell.’
So, here goes: in its current state, the FCA does not offer consumers the protection they deserve from rogues and villains.
No wonder Liz Truss is thinking about a massive overhaul of financial regulation that could see the FCA razed from the face of the earth.
Few – especially Edward and John – would grieve if that were to happen.
