Energy price cap hike to help suppliers recover record level of unpaid bills

Published

11 months ago

December 15, 2023

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The energy price cap is set to be lifted to help suppliers recover a record £3bn of bad debt accrued through unpaid gas and electricity bills, the industry regulator has announced.

Ofgem said on Friday it was consulting on proposals for a one-off cap adjustment of £16 – equivalent to around £1.33 a month – to be paid between April 2024 and March 2025.

Those on pre-payment meters would not be affected by the plan, the watchdog said, adding the sum it wanted to impose on households was down on an initial proposal of £17.

The energy watchdog said the £3bn debt pile was a result of the impact of the energy-driven cost of living crisis on household budgets.

“The scale of this debt means that it is crucial that suppliers have sufficient funding to ensure they can meet the strict regulations Ofgem has in place around how they treat customers facing payment difficulties.

“This adjustment to the price cap will ensure suppliers have the resources to support customers struggling with debt.”

Ofgem is anxious to avoid a repeat of severe financial pressure on many suppliers after dozens, including Bulb, collapsed amid a spike in wholesale energy costs in 2021.

That crisis added about £82 to every single customer’s bill at the time, as companies with more robust business models were appointed to take on the households left stranded.

The price cap, which has come down since the unprecedented bills witnessed last winter, not only reflects market prices but also contains other mechanisms to allow firms to recover limited costs.

Energy supplier profits have been elevated this year due to Ofgem allowing firms to recover from deep losses.

They were incurred through the purchase of additional wholesale energy to cover the additional customers taken on during the period when rival suppliers collapsed.

The UK’s biggest supplier, British Gas, reported record profits of £969m for the first six months of 2023, up almost 900% from £98m in the same period of 2022.

Meanwhile, French state-owned EDF reported its UK business made profits of almost £2bn for the first half of last year – including the earnings from its nuclear power plants – up from £738m in the same months of 2022.

Scottish Power reported a £576m profit for the first half of the year and E.On made £723m. SSE reported pre-tax profits of £565.2m for the first half of the year.

Simon Francis, coordinator of the group End Fuel Poverty Coalition, argued it was unfair for the regulator to make the majority pay for a failed system.

“This outrageous tax on energy consumers is simply not fair,” he said.

“Energy suppliers have posted billions in profits already this year while millions of people struggle in cold damp homes.

“The record levels of energy debt are due to Britain’s broken energy system, not the fault of the hard-pressed public.

“We have called for the government to introduce a help to repay scheme for homes in energy debt. But ministers have refused to listen and now customers will pay the price of their inaction.”

Tim Jarvis, Ofgem’s director for markets, said: “We know that cost of living pressure is hitting people hard and this is evident in the increase in energy debt reaching record levels.

“We have taken steps to ensure energy firms are taking better care of customers and treating people struggling with debt fairly, through our robust consumer standards, and that companies are getting in touch to offer support, such as affordable payment plans, where needed.”

He added: “However, the record level of debt in the system means we must take action to make sure suppliers can recover their reasonable costs, so the market remains resilient, and suppliers are offering consumers support in managing their debts.

“The proposals set out today are not something we take lightly. However, we feel that they are necessary to address this issue. This approach will ensure the costs are recovered fairly, without penalising a particular group of customers.

“The price cap has helped to protect consumers from a volatile gas market. However, it remains a blunt instrument in a changing energy sector, and the way it works may need to change in the future, so customers continue to be protected.”

Ofgem said action to help those struggling to pay their bills this winter, which came into force on Thursday, included rules on the offer of debt repayment plans and holidays.

UK

Teenage girl killed on M5 in Somerset after getting out of police car named

Published

2 hours ago

November 15, 2024

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Teenage girl killed on M5 in Somerset after getting out of police car named

A teenage girl who was killed after getting out of a police car on the M5 in Somerset has been named.

Tamzin Hall, 17 and from Wellington, was hit by a vehicle that was travelling southbound between junction 24 for Bridgwater and junction 25 for Taunton shortly after 11pm on Monday.

She had exited a police vehicle that had stopped on the northbound side of the motorway while transporting her.

A mandatory referral was made to the Independent Office for Police Conduct, which is now carrying out its own investigation into what happened.

Avon and Somerset Police said: “Our thoughts and sympathies go out to Tamzin’s family for their devastating loss.

“A specially-trained family liaison officer remains in contact with them to keep them updated and to provide support.

“The family have asked for privacy at this difficult time.”

The police watchdog, the IOPC, has been asked to investigate.

In a statement, director David Ford, said: “This was a truly tragic incident and my thoughts are with Tamzin’s family and friends and everyone affected by the events of that evening.

“We are contacting her family to express our sympathies, explain our role, and set out how our investigation will progress. We will keep them fully updated as our investigation continues.”

Paramedics attended the motorway within minutes of the girl being hit but she was pronounced dead at the scene.

The motorway was closed in both directions while investigations took place. It was fully reopened shortly after 11am on Tuesday, Nationals Highways said.

UK

Mohamed al Fayed’s brother Salah also abused women, say female Harrods employees

Published

2 hours ago

November 15, 2024

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Mohamed al Fayed's brother Salah also abused women, say female Harrods employees

A survivors group advocating for women allegedly assaulted by Mohamed al Fayed has said it is “grateful another abuser has been unmasked”, after allegations his brother Salah also participated in the abuse.

Justice for Harrods Survivors says it has “credible evidence” suggesting the sexual abuse allegedly perpetrated at Harrods and the billionaire’s properties “was not limited to Mr al Fayed himself”.

The group’s statement comes after three women told BBC News they were sexually assaulted by al Fayed’s brother, Salah.

One woman said she was raped by Mohamed al Fayed while working at Harrods.

Helen, who has waived her right to anonymity, said she then took a job working for his brother as an escape. She alleges she was drugged and sexually assaulted while working at Salah’s home on Park Lane, London.

Two other women have told the BBC they were taken to Monaco and the South of France, where Salah sexually abused them.

The Justice for Harrod Survivors representatives said: “We are proud to support the survivors of Salah Fayed’s abuse and are committed to achieving justice for them, no matter what it takes.”

The group added it “looks forward to the others on whom we have credible evidence – whether abusers themselves or enablers facilitating that abuse – being exposed in due course”.

Salah was one of the three Fayed brothers who co-owned Harrods.

The business, which was sold to Qatar Holdings when Mohamed al Fayed retired in 2010, has said it “supports the bravery of these women in coming forward”.

A statement issued by the famous store on Thursday evening continued: “We encourage these survivors to come forward and make their claims to the Harrods scheme, where they can apply for compensation, as well as support from a counselling perspective and through an independent survivor advocate.

“We also hope that they are looking at every appropriate avenue to them in their pursuit of justice, whether that be Harrods, the police or the Fayed family and estate.”

The Justice for Harrods Survivors group previously said more than 400 people had contacted them regarding accusations about Mohamed al Fayed, who died last year.

One of those alleged to have been abused is Bianca Gascoigne, the daughter of former England player Paul.

Speaking to Sky News in October, Gascoigne said she was groomed and sexually assaulted by al Fayed when she worked at Harrods as a teenager.

UK

Wes Streeting ‘crossed the line’ by opposing assisted dying in public, says Labour peer Harriet Harman

Published

2 hours ago

November 15, 2024

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Wes Streeting 'crossed the line' by opposing assisted dying in public, says Labour peer Harriet Harman

Wes Streeting “crossed the line” by opposing assisted dying in public and the argument shouldn’t “come down to resources”, a Labour peer has said.

Speaking on Sky News’ Electoral Dysfunction podcast, Baroness Harriet Harman criticised the health secretary for revealing how he is going to vote on the matter when it comes before parliament later this month.

MPs are being given a free vote, meaning they can side with their conscience and not party lines, so the government is supposed to be staying neutral.

But Mr Streeting has made clear he will vote against legalising assisted dying, citing concerns end-of-life care is not good enough for people to make an informed choice, and that some could feel pressured into the decision to save the NHS money.

He has also ordered a review into the potential costs of changing the law, warning it could come at the expense of other NHS services if implemented.

Baroness Harman said Mr Streeting has “crossed the line in two ways”.

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“He should not have said how he was going to vote, because that breaches neutrality and sends a signal,” she said.

“And secondly… he’s said the problem is that it will cost money to bring in an assisted dying measure, and therefore he will have to cut other services.

“But paradoxically, he also said it would be a slippery slope because people will be forced to bring about their own death in order to save the NHS money. Well, it can’t be doing both things.

“It can’t be both costing the NHS money and saving the NHS money.”

Baroness Harman said the argument “should not come down to resources” as it is a “huge moral issue” affecting “only a tiny number of people”.

She added that people should not mistake Mr Streeting for being “a kind of proxy for Keir Starmer”.

“The government is genuinely neutral and all of those backbenchers, they can vote whichever way they want,” she added.

Prime Minister Sir Keir Starmer has previously expressed support for assisted dying, but it is not clear how he intends to vote on the issue or if he will make his decision public ahead of time.

The cabinet has varying views on the topic, with the likes of Justice Secretary Shabana Mahmood siding with Mr Streeting in her opposition but Energy Secretary Ed Miliband being for it.

The Terminally Ill Adults (End of Life) Bill is being championed by Labour backbencher Kim Leadbeater, who wants to give people with six months left to live the choice to end their lives.

Under her proposals, two independent doctors must confirm a patient is eligible for assisted dying and a High Court judge must give their approval.

The bill will also include punishments of up to 14 years in prison for those who break the law, including coercing someone into ending their own life.

MPs will debate and vote on the legislation on 29 November, in what will be the first Commons vote on assisted dying since 2015, when the proposal was defeated.