The energy price cap is going to fall in October – but the boss of Ofgem has warned families are “absolutely going to struggle” with their bills this winter.
A typical household paying by direct debit for gas and electricity will face an annual charge of £1,923 from October to December, a fall of about £150.
Despite that, millions of households could end up paying more because government support with bills – worth £66 a month – has now been withdrawn.
Image: Energy price cap forecast
Speaking to Sky News, Ofgem chief executive Jonathan Brearley said it would be “helpful” if these subsidies were reintroduced by the government.
And he stressed that the regulator, the government and suppliers must work together to give vulnerable customers the support they need.
Downing Street has faced growing calls to explore alternatives to the price cap, such as a social tariff that would give cheaper gas and electricity to those in need.
Andrew Bowie, parliamentary undersecretary of state for nuclear and networks, told Sky News that the government “will consider any and all options moving forward”.
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When asked whether the price cap will be looked at again, Mr Bowie said: “Over the period of its existence, the price cap has yielded hugely positive results for the British people.
“However, it is right that when times change, circumstances are looked at again, which is why we have a call for evidence open right now, which is why we’re reviewing how the energy market works in this country as a whole.
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“We are determined to get it right moving forward.”
Citizens Advice has warned this winter could be “as bad, if not worse” than the last – and a record number of people are already behind on their energy costs.
Calling for the government to step in quickly with targeted support, it said: “The next few months will push households like these over the edge.”
Experts have warned that bills could head back above the £2,000 mark early next year.
Analysis: Poorest could end up paying more
It is better off customers that stand to benefit, while poorer households could end up paying more.
A lower price cap is a move in the right direction – but the extra cash will quickly be absorbed by higher housing and grocery bills
Monthly mortgage payments have spiked as interest rates continue to climb, and food prices are rising at an annual rate of 14.9%.
The new level is also much higher than it was in October 2021, before Russia’s invasion of Ukraine precipitated a global energy crisis.
The price a supplier can charge for gas is falling from 6.9p to 6.89p per kilowatt hour (kWh) – with the cost of electricity dropping from 30.1p per kWh to 27.35p.
Weaker wholesale prices have led to this reduction – and Ofgem says the market is stabilising, with suppliers returning to a healthier financial position.
The price cap would have been lower still, by a further £100, if it had reflected a looming Ofgem calculation that gives a nod to reduced energy use.
The regulator has also unveiled measures to reduce costs for prepayment meter customers – alongside extra support for those at risk of disconnection from the network.
But there has also been a small increase to the earnings that energy firms can make per household – an extra £10 a year – most of which is ringfenced in the event of a supplier failure.
Ofgem says that, at the peak of the energy crisis, 30 suppliers went bust because they didn’t have enough capital in reserve to stay in business – adding £83 to the bills of all customers.
An ‘encouraging’ fall
Household consumption has fallen sharply following the bill shocks of the past 18 months.
Energy Security Secretary Grant Shapps described October’s fall in the price cap as “encouraging” – and claimed it was another milestone in the government’s promise to halve inflation.
“We are successfully driving Putin out of global energy markets so he can never again hold us to ransom, and we are boosting our energy independence to deliver cheaper, cleaner and more secure energy to British homes,” he added.
But Labour’s shadow energy and net zero secretary, Ed Miliband, claimed the latest price cap announcement “demonstrates the scandalous Tory cost of living crisis is still raging for millions of people”.
He claimed the government was siding with oil and gas companies making record profits, adding: “Higher energy bills are unfortunately here to stay under the Conservatives, even with this fall, bills are significantly higher than they were only three years ago.”
The next price cap announcement – covering January to March 2024 – will be made in three months’ time.
A thinktank has declared millions of the poorest households will pay more despite the price cap cut.
The Resolution Foundation blamed the withdrawal of energy support schemes and a rise in charges added to bills.
The price cap – which applies to England, Wales and Scotland – sets a limit on the amount suppliers can charge for each unit of gas and electricity used and for the privilege of being connected to the energy network. The more you use, the more you pay.
Even at the reduced cap mark, it remains about £800 above 2019 levels at a time when families are dealing with high inflation and higher housing costs – mostly as a consequence of interest rate rises by the Bank of England intended to dull the pace of price rises in the economy.
Ofgem has said it now expects suppliers to continue improving service and support their most vulnerable customers.
David Cheadle, chief operating officer at the Money Advice Trust, said it is an “extremely worrying time” for households struggling to keep up with their bills – and many consumers will face “impossible choices without further support”.
Appointing Lord Mandelson as the UK’s ambassador to the US was “worth the risk”, a minister has told Sky News.
Peter Kyle said the government put the Labour peer forward for the Washington role, despite knowing he had a “strong relationship” with convicted sex offender Jeffrey Epstein.
It is this relationship that led to Peter Mandelson being fired on Thursday by the prime minister.
Image: Lord Mandelson and Jeffrey Epstein. File pic
But explaining the decision to appoint Lord Mandelson, Business Secretary Mr Kyle said: “The risk of appointing [him] knowing what was already public was worth the risk.
“Now, of course, we’ve seen the emails which were not published at the time, were not public and not even known about. And that has changed this situation.”
Speaking to Sunday Morning with Trevor Phillips, he rejected the suggestion that Lord Mandelson was appointed to Washington before security checks were completed.
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He explained there was a two-stage vetting process for Lord Mandelson before he took on the ambassador role.
The first was done by the Cabinet Office, while the second was a “political process where there were political conversations done in Number 10 about all the other aspects of an appointment”, he said.
This is an apparent reference to Sir Keir Starmer asking follow-up questions based on the information provided by the vetting.
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21:50
‘We knew it was a strong relationship’
These are believed to have included why Lord Mandelson continued contact with Epstein after he was convicted and why he was reported to have stayed in one of the paedophile financier’s homes while he was in prison.
Mr Kyle said: “Both of these things turned up information that was already public, and a decision was made based on Peter’s singular talents in this area, that the risk of appointing knowing what was already public was worth the risk.”
Mr Kyle also pointed to some of the government’s achievements under Lord Mandelson, such as the UK becoming the first country to sign a trade deal with the US, and President Donald Trump’s state visit next week.
Mr Kyle also admitted that the government knew that Lord Mandelson and Epstein had “a strong relationship”.
“We knew that there were risks involved,” he concluded.
PM had only ‘extracts of emails’ ahead of defence of Mandelson at PMQs – as Tories accuse him of ‘lying’
Speaking to Sky News, Kyle also sought to clarify the timeline of what Sir Keir Starmer knew about Lord Mandelson’s relationship with Epstein, and when he found this out.
Allegations about Lord Mandelson began to emerge in the newspapers on Tuesday, while more serious allegations – that the Labour peer had suggested Epstein’s first conviction for sexual offences was wrongful and should be challenged – were sent to the Foreign Office on the same day by Bloomberg, which was seeking a response from the government.
But the following day, Sir Keir went into the House of Commons and publicly backed Britain’s man in Washington, giving him his full confidence. Only the next morning – on Thursday – did the PM then sack Lord Mandelson, a decision Downing Street has insisted was made based on “new information”.
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7:53
Vetting ‘is very thorough’
Speaking to Sunday Morning with Trevor Phillips, Mr Kyle said: “Number 10 had what was publicly available on Tuesday, which was extracts of emails which were not in context, and they weren’t the full email.
“Immediately upon having being alerted to extracts of emails, the Foreign Office contacted Peter Mandelson and asked for his account of the emails and asked for them to be put into context and for his response. That response did not come before PMQs [on Wednesday].
“Then after PMQs, the full emails were released by Bloomberg in the evening.
“By the first thing the next morning when the prime minister had time to read the emails in full, having had them in full and reading them almost immediately of having them – Peter was withdrawn as ambassador.”
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4:48
Government deeming Mandelson to be ‘worth the risk’ is unlikely to calm Labour MPs
The Conservatives have claimed Sir Keir is lying about what he knew, with Laura Trott telling Sky News there are “grave questions about the prime minister’s judgement”.
The shadow education secretary called for “transparency”, and told Sunday Morning with Trevor Phillips: “We need to understand what was known and when.”
Image: Laura Trott says there are ‘grave questions about the prime minister’s judgement’
They believe that Sir Keir was in possession of the full emails on Tuesday, because the Foreign Office passed these to Number 10. This is despite the PM backing Mandelson the following day.
Ms Trott explained: “We are calling for transparency because, if what we have outlined is correct, then the prime minister did lie and that is an extremely, extremely serious thing to have happened.”
She added: “This was a prime minister who stood on the steps of Downing Street and said that he was going to restore political integrity and look where we are now. We’ve had two senior resignations in the space of the number of weeks.
“The prime minister’s authority is completely shot.”
But Ms Trott refused to be drawn on whether she thinks Sir Keir should resign, only stating that he is “a rudderless, a weak prime minister whose authority is shot at a time we can least afford it as a country”.
People who attacked and injured police officers at a march organised by far-right activist Tommy Robinson “should and will pay a price” for their violence, the business secretary has said.
Peter Kyle condemned the bad behaviour at the “Unite the Kingdom” event in London on Saturday, which saw up to 150,000 take part in the rally.
Appearing on Sunday Morning With Trevor Phillips, Mr Kyle said the number of people who turned up showed that free speech is “alive and well” in the UK.
He said: “It doesn’t disturb me, because it’s actually proof that we live in a country where free speech, free association, is alive and well.
“The bit that disturbs me is that when a minority go to an extreme and end up perpetrating violence against the police – that is unacceptable and those people should and will pay a price for it.”
Home Secretary Shabana Mahmood vowed that anyone found to have taken part in criminal activity would “face the full force of the law” – as police said at least 25 people were arrested and 26 officers were injured – including four who were seriously hurt.
Prime Minister Sir Keir Starmer posted on X: “People have a right to peaceful protest. It is core to our country’s values.
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“But we will not stand for assaults on police officers doing their job or for people feeling intimidated on our streets because of their background or the colour of their skin.
“Britain is a nation proudly built on tolerance, diversity and respect. Our flag represents our diverse country and we will never surrender it to those that use it as a symbol of violence, fear and division.”
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Protesters forming the rally gathered in the centre of the capital, holding Union and St George’s flags.
Mr Kyle said: “The flag was waved quite a lot and I do want to make the point that the flag belongs to all of us.
“That flag means a lot of different things to a lot of people, but it is about essential British and English values and principles.
“Those English values and principles include free speech, freedom of association and the like, and all of those things are demonstrated just by the fact that that protest went along and that demonstration went along completely freely, it shows that those values are actually alive and well.”
Image: Activists fly flags and carry wooden crosses during the ‘Unite the Kingdom’ march in London. Pic: Reuters
Protesters heard a series of speeches, including from Robinson, who called it the “biggest freedom of speech” in British history.
Police estimated that between 110,000 to 150,000 attended the event.
An anti-racism counter-protest, attended by about 5,000 campaigners, also took place, with the two groups clashing on Whitehall and Trafalgar Square, separated by lines of police.
The Metropolitan Police‘s Assistant Commissioner Matt Twist said officers faced “significant aggression” from “Unite the Kingdom” attendees.
“The violence they faced was wholly unacceptable,” he said.
“Twenty-six officers were injured, including four seriously – among them broken teeth, a possible broken nose, a concussion, a prolapsed disc and a head injury.”
People have been arrested for a range of offences, including affray, violent disorder, assaults, and criminal damage.
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5:38
Protesters clash with police
Police said the Robinson crowd was too big to fit into Whitehall and a confrontation happened when police tried to stop them from encircling counter-protesters and accessing the area from different routes.
A Met spokesman said: “When officers moved in to stop them, they faced unacceptable violence. They were assaulted with kicks and punches. Bottles, flares and other projectiles were thrown.”
Officers continued to face aggression in multiple locations, in particular at the north of Whitehall as they worked to create a safe exit route for those who had been taking part in the Stand Up To Racism protest.
Robinson supporters hurled projectiles at counter-demonstrators as both groups faced off on Whitehall, police said.
A row of police horses stood opposite a crowd waving Union flags, and at one point, a glass bottle seemed to strike one of the horses, causing both the animal and its rider to stumble backward.
Image: ‘Unite the Kingdom’ protesters in Trafalgar Square. Pic: Reuters
Image: Protesters in Whitehall. Pic: Reuters
Image: Activists take part in the March Against Fascism, organised by Stand Up To Racism. Pic: PA
Musk makes surprise appearance
Robinson live-streamed the rally on X, with its audience peaking at 2.9 million viewers on Saturday afternoon.
Making a surprise appearance via video link, tech billionaire Elon Musk called for a “change of government” in the UK.
“You can’t – we don’t have another four years, or whenever the next election is, it’s too long,” Musk told the crowd. “Something’s got to be done. There’s got to be a dissolution of parliament and a new vote held.”
Image: Katie Hopkins and Tommy Robinson at the rally. Pic: PA
‘Revolution has started – you can’t stop it’
With a voice which sounded hoarse from shouting, Robinson told crowds during his speech that “millions” had showed up for the rally.
“The dam has well and truly burst,” he said. “The cat is out of the bag and there is no putting it back in. The silent majority will be silent no longer.”
Addressing the prime minister and the Labour government, Robinson said: “The revolution has started – and you can’t stop it.”
Referring to a Court of Appeal decision to overturn an injunction blocking asylum seekers being housed at The Bell Hotel in Epping, Essex, Robinson claimed UK courts found the rights of undocumented migrants supersede those of the “local community”.
He said: “They told the world that Somalians, Afghanis, Pakistanis, all of them, their rights supersede yours – the British public, the people that built this nation.”
The Home Office will return migrants to France for the first time next week under the terms of a new deal, Sky News understands.
The agreement, which was signed in July, saw migrants first detained on 6 August, and they will now be flown back to the continent.
The ‘one in, one out’ deal means the UK can send people back to France if they have entered the country illegally. In exchange, the UK will allow asylum seekers to enter through a safe and legal route – as long as they have not previously tried to enter illegally.
It is a pilot scheme for now, which will be in place until June 2026.
On Saturday, up to 150,000 people marched in London, gathering around Westminster in a protest dubbed ‘Unite the Kingdom’, and organised by far-right activist Tommy Robinson. There were a number of clashes with police, leading to 25 arrests and 26 police officers being injured.
Laura Trott, the shadow education secretary, said the “horrendous incidents” of violence were “completely abhorrent”, and said she was glad to hear those involved will feel the force of the law.
But speaking on Sunday Morning with Trevor Phillips, she warned that the protest shows that people feel “let down” by the government on immigration.
Ms Trott told Sky News: “There is clearly an issue in this country at the moment about immigration and migration. People clearly feel let down by a government that came in and said they were going to ‘smash the gangs’. And what we’ve seen is an increase in migration.
“We are not seeing the action from this government, which is distracted by scandal after scandal.”
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6:55
Public feel ‘let down’ on immigration
She also accused Sir Keir Starmer of being a “rudderless prime minister”.
Business Secretary Peter Kyle said that violence against police is “unacceptable” but said it is “proof that we live in a country where free speech, free association is alive and well”.
On immigration, he insisted that the government is “straining at the bit to get a grip on the migration crisis”, which Mr Kyle said Labour “inherited from the Conservatives”.
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1:41
‘Free speech is alive and well’
“We’ve been doing everything we can,” he said.
“The lesson is that by cooperating with our partners, France, rather than rowing with them, we are able to deliver.
“So I hope the flights will start as quickly as possible.”
But he said he was unaware of the exact date.
Mr Kyle added that ministers were “also angry about what we’ve inherited” and that they were doing “everything possible to get a grip on it”.
The number of migrants arriving in the UK after crossing the English Channel has topped 30,000 for the year so far.
It is the earliest point in a calendar year at which the 30,000 mark has been passed since data on the crossings was first reported in 2018.