Martin Lewis 'loses rag' as he blasts energy price cap changes as 'f***ing disgrace'

16 May 2022, 10:53 | Updated: 16 May 2022, 12:39

By Asher McShane

Finance guru Martin Lewis has apologised for “losing his rag” and accusing Ofgem of “selling customers down the river” with changes to the energy price cap.

As millions of people face being hammered financially as the cost of living crisis bites, Ofgem announced plans to review the energy price cap every three months.

The energy regulator said it would help pass on savings from a potential fall in gas prices to customers more rapidly, but Martin Lewis, founder of moneysavingexpert.com, said the notion was a “f***ing disgrace” in an 'emotional rant', for which he subsequently apologised.

He posted online: “I'd like to formally apologise to the Ofgem staff for losing my rag in a background briefing just now and saying its changes are a "fucking disgrace that sells consumers down the river".

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“I should've behaved better. My ire's institutional not individual, its was inappropriate…”

"I lost it when getting a briefing about today's proposals, where it feels like at every turn, in these desperate times where lives are at risk, it has ignored all asks for consumers and instead kowtowed to the industry (I hope history proves me wrong)...

"My breaking point was when hearing how instead of listening to calls to scrap its proposed market stabilization charge, it was making it harsher to really 'stop the harmful effects of competition'

"I.e. staggeringly its aim's to effectively STOP firms undercutting the price cap...

"Please accept that was (and this is) an emotional rant, not a considered piece.

"I pray when I do further analysis I have to apologise again as I've got it very wrong (if not I worry about dire consequences for consumers - we must do more to make things better for them)".

Food poverty campaigner Jack Monroe replied: "You speak for all of us, Martin. Their changes ARE a f***ing disgrace that sell consumers down the river.

"Anger is a powerful tool, and you more than most have every right to wield it. You’ve done enough, politely enough, for long enough, to have just about had enough. X"

Speaking to James O’Brien today, Mr Lewis said: “The regulator is entrenching the problems.

“What we have is privatised energy firms in this country, but we effectively now have restricted competition and regulated prices in the form of a price cap.

“What is the benefit of privatisation if you work in that marketplace?

“My suspicion is what has happened here is the government is smarting from the enormous bills it has had to pay for firms going bust.

“We all pay for firms that have gone bust [in the form of higher bills and standing charges] but I think what has happened here is the govt has an enormous bill because of Bulb.

“That is costing the government billions. My suspicion.. is pressure has been put on to say we must not get in a situation like that again. And so all of the policies that are being put in place are to restrict government liability.”

The energy regulator said that it might insert two new reviews a year, one in January and another in July.

It would help pass on savings from a potential fall in gas prices to customers more rapidly, Ofgem said, and also protect under-pressure energy suppliers from being damaged by the cap.

"Today's proposed change would mean the price cap is more reflective of current market prices and any price falls would be delivered more quickly to consumers," said Ofgem chief executive Jonathan Brearley.

"It would also help energy suppliers better predict how much energy they need to purchase for their customers, reducing the risk of further supplier failures, which ultimately pushes up costs for consumers.

"The last year has shown that we need to make changes to the price cap so that suppliers are better able to manage risks in these unprecedented market conditions."

After a consultation, Ofgem hopes that the changes could come into force from October, meaning the first change under the new system would be made in January.

The energy price cap - currently at a record £1,971 per year for the average household - is reviewed every six months and changed in October and April.

Ofgem considers a range of information when deciding where the price cap should be set. The price that energy suppliers pay for the gas and electricity they buy is a major part of this.

Over the last year gas prices have risen so rapidly that suppliers were often forced to sell the gas for less than they bought it for due to the price cap.

By changing the price cap more often, Ofgem will make it more reflective of international gas prices, taking some of the pressure off suppliers.

The proposed changes to the cap will also allow suppliers to recover some other costs in a better timescale.

"Our top priority is to protect consumers by ensuring a fair and resilient energy market that works for everyone," Mr Brearley said.

"Our retail reforms will ensure that consumers are paying a fair price for their energy while ensuring resilience across the sector."

The price cap news comes after a Tory minister sparked anger by saying people struggling with the cost of living crisis should simply 'get a better job' or 'work more hours.'

Safeguarding Minister Rachel Maclean said that long term the Government wanted people to be able to find better-paid work, or take on extra hours to make more money in an interview with Sky News.

"I think what we need to focus on now is over the long-term. We do have these short-term pressures on us that we're all aware of. 

"But over the long-term we need to have a plan to grow the economy and make sure that people are able to protect themselves better, whether that is by taking on more hours or moving to a better-paid job.

"These are long-term actions but that is what we are focused on as a Government."