Energy price cap & Government support - Darren Jones MP, Business Committee Chair, comment
3 February 2022
Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee, has commented on today’s Ofgem’s announcement of an increase in the energy price cap and the Chancellor’s package of measures.
Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee, said:
“The increase in the energy price cap will hit many families hard. The Chancellor’s package is welcome, but it amounts to short-term, immediate help rather than a first step to tackling the longer-term problems in our energy market.
The Chancellor has, in effect, announced an energy mortgage for each household. There is the distinct prospect that Ofgem could return in six months to announce a further increase in the energy price cap but the Chancellor’s announcement did not set out a plan for the future.
The Government must deal with the costs of heating our homes in the long term, not just for the next six months. As the BEIS Committee has said in our decarbonising heat in homes report, we need better home insulation, reduced cost gas boiler replacements and help for bill payers and heat sector workers with the costs and opportunities of the transition.
At this time when many households are struggling to heat their homes, gas producers are raking in massive profits. The case for a windfall tax is an issue which the BEIS Committee will be looking to explore in our current inquiry on energy pricing and the future of the energy market.
On Tuesday, we look forward to examining some of these issues, including the increased energy price cap and the Government's response when we question the regulator Ofgem, consumer champions, economists and energy companies.”
On Thursday, the BEIS Committee published a report on decarbonising heat in homes stating that the Government’s approach to decarbonising residential heating lacks clear direction and current policies are not of the scale necessary to help meet the UK’s 2050 net zero target.
On Tuesday 8 February, the Committee will be assessing the operation of the energy price cap and the impact it has on household energy bills.
At Tuesday’s session, as part of the inquiry into energy pricing and the future of the energy market, the Committee will question witnesses including Jonathan Brearley, CEO of Ofgem; Emma Pinchbeck, CEO, Energy UK; Stephen Fitzpatrick, Founder of OVO Energy; and Jonathan Marshall, Senior Economist at the Resolution Foundation think tank.
The session will be part of the Committee’s inquiry which was launched following unprecedented surges in wholesale energy prices since summer 2021 and which have caused a number of energy suppliers to go out of business.
During this session, the cross-party Committee will ask questions about the challenges facing the energy market, how effective the energy price cap is at protecting consumers, and whether regulatory changes may be needed to address problems in the sector.
Evidence session: Energy pricing and the future of the energy market, 10.30am, Tuesday 8 February
- Watch Parliament TV: Energy pricing and the future of the Energy Market
- Inquiry: Energy pricing and the future of the Energy Market
Tuesday 8 February
- Jonathan Brearley, CEO, Ofgem
- Neil Kenward, Director of Strategy and Decarbonisation, Ofgem
- Peter Smith, Director of Policy and Advocacy at National Energy Action
- Jonathan Marshall, Senior Economist, Resolution Foundation
- Stephen Fitzpatrick, Founder, OVO Energy
- Emma Pinchbeck, CEO, Energy UK
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