Money expert Martin Lewis has hit out at the energy price cost being inflicted on households. The financial journalist, 51, was interviewing Ofgem chief executive Jonathan Brearley on ITV's Good Morning Britain following the news that the typical annual household energy bill will fall to £2,074 a year from July.
On Thursday, May 25, Ofgem slashed energy bills for everyone in the country, cutting the energy price cap by 17%. The reduction is slightly less than the 17.5% that had been forecast. It means that the average household, which currently pays no more than £2,500 a year for gas and electricity, will now pay an average of £2,074 - the exact amount you pay depends on how much you use. The standing charge is £300 a year.
“You accept that it’s a moral hazard to make people pay £300 a year to have the facility to have gas and electricity?” Martin asked Jonathan. “When they’re lower users they can’t cut back anymore.”
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Jonathan, who has been in his role since 2020, replied: “Well that’s part of the reason that we’re opening up this question on operating costs. What we’re trying to reflect is the cost of the system as a whole so it is something we’re going to look at.”
He added: “The other thing we are doing, the government has already stepped in to equalise prepayment meter rates, for example. We’re going to be looking at standing charges for prepayment meters alongside this so we are going to be asking ourselves some very big questions on standing charges but that will take time to come through.”
On Thursday, May 25 Ofgem made the announcement on energy bills, thus removing some of the financial pain inflicted by the unprecedented surge in gas and electricity costs. Prices spiked last year after Russia's invasion of Ukraine, which saw both oil and natural gas costs shoot up - a situation that was made worse by the imposition of sanctions on the Kremlin by Western governments.
The new cap figure compares to the £3,280 level set by Ofgem for March-June, meaning a £1,206 reduction in the cap from July and a reduction in average bills by £426 a year. Good Morning Britain airs on ITV1 and ITVX from 6am.
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