LBC Views: Action is needed before more small energy suppliers go bust
20 September 2021, 16:20 | Updated: 19 October 2021, 16:38
Lawyer and LBC host Dean Dunham says Britain faces an energy crisis and Government needs to act now before more small energy suppliers go bust and consumers are wacked with continuing soaring bills.
The crisis has been caused by wholesale prices – the price energy firms pay - going up by four times compared to nearly 20 months ago, aggravated by a chain of events, including: a period of calm weather, reducing the availability of wind power and hence driving up the price of gas, a supply cable between Britain and France being damaged by fire (a significant factor when you consider that the UK imports half its gas supply) and Russia playing god by reducing its shipments of gas to Europe, almost certainly to exert pressure on western governments to approve the controversial NordStream 2 gas pipeline to Germany.
Another key factor that is now contributing to the crisis in the domestic energy sector is the poor policy adopted by Government in relation to price caps. A price cap is always welcome as on the face it this is a valuable consumer protection. However, these caps are ultimately going to cause energy prices to increase, as many small energy suppliers have had to close because they cannot pass on cost increases fast enough due to the cap. Customers of energy providers that go bust are moved by Ofgem to an alternative supplier and this often results in their energy bills rising.
Experts are predicting that what was circa 30 energy suppliers is now in danger of reducing to below 10. This will mean less competition and consequently greater bill for consumers.
If nothing changes anyone coming out of a cheap, fixed energy deal will face a massive increase in their bills, with most tariffs costing at least 40% more than they did last year.
My advice for consumers is to search the market now and lock into a two-year fixed deal.
