BREAKING: GOOD LAW PROJECT TO SUE OFGEM OVER PRICE CAP FAILURE

 From Good Law Project

Legal campaign group Good Law Project, Fuel Poverty Action, and the Highlands and Islands Affordable Homes Warmth Group have announced they are planning to sue the energy regulator Ofgem, over its failure to mitigate the impact of rising energy bills on consumers. 

 

This is likely to be the first legal action of its kind over the energy bills crisis, and others may join the action - including vulnerable individuals disproportionately impacted by Ofgem’s actions. 

 

In response to Ofgem’s announcement today that it is raising the price cap to an eye-watering £3,549, Jo Maugham, Director of Good Law Project said: 

 

The announcement today will devastate families. Just who and what is Ofgem for? Do not be fooled. This is a choice. And the choice they’ve made is to let low-income consumers and small businesses bear the brunt of this crisis.

 

We believe Ofgem can - and should do more. We intend to put the question before the High Court, and will ask for a fast-tracked timeline to reflect the urgency of this crisis.

 

The Ofgem announcement will push millions of people into poverty this winter and the average household bill up by £1,578 - an 80 per cent increase from the current cap. 

 

GLP will ask the High Court to ensure the regulator upholds its legal duties to, among other things, carry out an impact assessment before confirming the price cap increase, including assessing the disproportionate impact on elderly people, children and people with disabilities.

 

Good Law Project argues that Ofgem has the power to do more to protect vulnerable people and believes before raising the cap, Ofgem is legally required to:

• Provide evidence it has carried out a proper impact assessment
• Consider appropriate mitigation measures for the most vulnerable, including a lower social tariff.

In July, the campaign group wrote to Ofgem, expressing concern about its decision-making. We asked it to provide proof of its impact assessments. It failed to produce any such evidence. Last week GLP put the regulator on notice of formal legal action if it failed to uphold its duties. A formal response to the letter is expected today, but today’s announcement provides no indication that an impact assessment has been carried out.

Fuel Poverty Action and DPAC condemn Ofgem’s abusive standing charge policies

 

Fuel Poverty Action and Disabled People Against Cuts have together written to Ofgem CEO Jonathan Brierley about the gross injustice of the present standing charges, including loading the cost of failed suppliers onto this part of people’s bills. [1] They say   "It is appalling that yet again Ofgem is punishing low income customers for its own failed regulation and the upside down priorities of the energy industry. …This is consistent with the blinkered approach that has led you to give “too much benefit to companies at the expense of consumers”, in the words of Christine Farnish, the Ofgem director who resigned last week.   Ofgem has claimed (2) that high standing charges are the only way to protect high users, some of whom are people with health needs for electricity, eg for electrical medical equipment. But the two groups suggest that Ofgem’s obligation to vulnerable customers is being abused as an excuse for policies that impoverish and endanger thousands of people, including many who are disabled people. They name instead several alternative ways to protect people with high energy needs - without impoverishing vast numbers of low income customers.   With Fuel Poverty Action’s proposal of Energy For All (e4a) each household would be entitled, free, to enough energy to cover basic needs, but people would pay a higher tariff for what they use above that amount. This would offer much needed security to all - including those who need more because of their health, disabilities, housing conditions, or family size. It would be paid for by the higher per-unit tariff on excess use, by windfall taxes and by ending the millions of pounds now poured daily into fossil fuel subsidies.   Other options listed include extensions of the Warm Home Discount, social tariffs, better disability benefits, and good safe insulation for vulnerable customers. And they say that companies that cannot fulfil their purpose of providing the energy people need at a cost they can afford, could - and must - be brought back into public hands.   Ruth London from FPA comments,   Instead of looking at real, proportionate, workable changes to the current upside down pricing framework, Ofgem has chosen to continue hitting low income users harder than affluent neighbours. The standing charge means that however much they cut down their usage many people will never be able to pay their bills.   Paula Peters of DPAC says,   I’m a low energy user because I am terrified to switch it on and worrying about costs all the time. It’s making me permanently anxious as it is all of us. Last winter I was in a lot of pain with a cold house. I needed NHS intervention: a steroid injection and a Nebuliser at A & E.   [1] https://www.fuelpovertyaction.org.uk/wp-content/uploads/2022/08/Letter-to-Ofgem-re-decision-on-Standing-Charge-August-2022.pdf [2] https://www.ofgem.gov.uk/publications/follow-our-review-arrangements-recovering-costs-supplier-failure

Fuel Poverty Action: 75% of those polled support the right to free energy to meet basic needs

 From Fuel Poverty Action

 

The present energy pricing system is leaving thousands each year to die of cold  and despite a government hand-out millions are in fear of next winter.

 

Fuel Poverty Action has long been advocating a free band of energy to every household to cover basic needs like keeping the lights on, keeping warm, and running a fridge. This would be paid for by higher prices for people who use more than they need, by windfall taxes  while prices and profits are so high, and by a permanent end to the subsidies paid to fossil fuel corporations, now worth billions of pounds.

 

This plan has the support of over 400,000 signatories on a change.org petition.  

 

And now nationwide polling has found that three quarters of the population support the right to free energy to meet people’s basic needs.  Only 10% opposed it. The poll was conducted by ICM, with a representative sample of 2000 British adults,10th - 12th  June 2022.

 

An even higher number – 81% – support abolition of the standing charge – the daily charge of around 44p per day on every customer’s energy bill, which must be paid regardless of how much you use.  Only 8% want this charge to stay.  

 

FPA have written to Ofgem about the way the costs of failing suppliers have been loaded onto the standing charge - the part of the bill that nobody can avoid - which FPA says is a “grotesque injustice”. 

 

Fuel Poverty Action’s Ruth London says,

 

The standing charge is even higher in some parts of the country, and it mounts up frighteningly quickly.  People on prepayment meters are often forced to find money to pay this charge before they can even turn the lights on. People who cut their use down to the bone in a bedsit end up paying more per unit of energy than those who are heating a mansion.

 

Energy For All would reverse this perverse system that incentivises waste and clobbers the people who can least afford it. It would finally give energy security where we most need it - at home. And it would press the government to finally fix the UK’s notoriously badly insulated housing and turn to cheaper, more sustainable sources of energy, like solar power and wind.