'Lives will be lost': Dire warnings as Ofgem boss says energy price rises will get 'much, much' worse
26 August 2022, 14:24 | Updated: 26 August 2022, 15:52
Ofgem chief: Things may well get much, much more difficult for customers
The boss of Ofgem has warned further rises to energy bills are coming and things will get ‘much more difficult’ for millions of struggling households.
Jonathan Brearley spoke to LBC today to urge the government to act “urgently and decisively” after the bills cap leapt to £3,549.
Longer term, independent forecasts suggest the cap could spiral even further to as high as £7,200 by April.
Martin Lewis told LBC today the situation is a “catastrophe”. He told James O’Brien: “I have catastrophised this because it is a catastrophe. I'm now begging and pleading with whomever the new Prime Minister is. It should have been dealt with far sooner."
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"I am here to beg, to plead, to pray that our new Prime Minister understands how urgent this is and, while we've left it late, on the 5th of September, on that day, lays out concrete plans that will stop a sizeable chunk of our population having genuine health risks because of lack of food and heat due to this horrible expense.”
The director of policy and research for Marie Curie warned "lives will be lost this winter as a direct result of the energy price cap announcement".
Dr Sam Royston told LBC that "without further targeted support, quite simply, terminally ill people could freeze to death this winter."
“The need to keep warm, keep pain at bay and power specialist medical equipment means that energy bills for some terminally ill people will not just be at the cap, but will be thousands of pounds higher than average households.
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“We already know 90,000 people per year die whilst living in poverty. Rocketing energy bills can only make this situation much much worse.”
The boss of Ofgem, Jonathan Brearley, told Shelagh Fogarty the government must address the energy crisis as soon as a new Prime Minister is elected.
“We do need, when we have a new prime minister in ten days time, his or her staff to urgently address it [the energy crisis]”
Mr Brearley also defended changing the price cap on a frequent basis, arguing not doing so could make things worse for consumers:
“If we don’t change [the price cap] more frequently in this very very volatile market that we have, more companies will fail and ultimately those costs come back to customers and customers end up paying more.”
“The difficult news I have to share is that this price rice is enormous, but there is further pricing pressure in the market, so things may well get much much more difficult for customers – unless we work with the government, with the industry, with charities, to make sure we address the impacts early.”
'our priority is to look after householders who face challenging times with bills.'
Mr Brearley warned that price rises could continue into next year, and said that more low carbon energy was the longer term solution to crisis.
“We do have to prepare ourselves for this not being the last price rise.
“The way out of this for the country … from our dependence on the sorts of markets we are having to depend on, is to diversify away from international gas markets.”
“That means more renewables, more nuclear, more low carbon generation and certainly diversification away from our reliance on gas as a whole.”
Their comments come as charities and think tanks warned the Government must urgently intervene to help struggling households.
Friday's energy price cap rise will plunge many households into destitution and put children at serious risk this winter, several bodies said.
Many pensioners will be feeling "utterly bewildered" and "badly let down", they said, while disabled people already "feel like they are being punished for using more energy".
The groups said it is "simply unthinkable" that the price rise can go ahead without significant Government intervention, and that "a growing feeling of powerlessness will not subside" until it sets out concrete plans to help.
The Government is working to develop more options to support households, with civil service officials working to ensure any additional cost-of-living commitments can be delivered "as quickly as possible" when the new Prime Minister is in place.
Becca Lyon, head of child poverty at Save The Children, called the price cap rise "a full-blown economic crisis for thousands of families".
She said: "Children are at serious risk from today's announcement and could spend this winter in cold homes, with fewer hot meals, despite the best efforts of their parents and carers. Our children deserve better."
She added that "debt and hardship are the only likely outcome" from the rise.
Rethink Mental Illness called the news a "hammer blow" to households across the country.
Alexa Knight, associate director for policy and practice, said: "Mental health and money worries are intrinsically linked, and we urgently need a clear response from Government to an economic crisis that has the potential to fuel a mental health emergency.
"There is a growing feeling of powerlessness which will not subside until we see concrete plans from the Government about how they will provide targeted support through the difficult months ahead."
Katie Schmuecker, principal policy adviser for the Joseph Rowntree Foundation, said households are "crying out for certainty and security".
She said: "It is simply unthinkable that the price rises announced today can go ahead without further Government intervention on a significant scale.
"To force the burden of rising wholesale energy prices onto households will plunge many into destitution.
"Millions more will face the threat of bills they simply cannot pay, homes they cannot heat, and stomachs they cannot fill."
She said the next Prime Minister will be remembered for who they protect, and must ensure "energy doesn't become a luxury only the wealthy can afford".
Age UK said getting through the autumn and winter is a "truly frightening prospect" for older people who have very little flex in their fixed incomes.
Charity director Caroline Abrahams said: "We are fast approaching a national emergency which will leave a significant proportion of the population unable to afford even a basic standard of living.
"Every day older people are telling us how scared they are; they need urgent reassurance from the Government that they will not abandon them."
Tom Marsland, policy manager disability equality charity Scope, said the cost of charging a wheelchair or using a breathing machine will have almost trebled in a year.
He said: "We've been inundated with calls from disabled people who don't know which way to turn and feel like they are being punished for using more energy.
"The Government must intervene now."
A spokesman said the Government recognised that people are "incredibly worried", and support will continue to reach those who need it most.
He said: "The civil service is also making the appropriate preparations in order to ensure that any additional support or commitments on cost of living can be delivered as quickly as possible when the new Prime Minister is in place."
