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Energy watchdog urges people NOT to join boycott of gas bill payments for fear thousands will refuse to pay this winter and cause chaos
- Don’t Pay calls on people to cancel their direct debit as of October 1
- Ofgem CEO Jonathan Brearley spoke on BBC Radio 4’s Today programme
- It’s because the price limit is updated quarterly instead of every six months
The head of energy regulator Ofgem has said people should not participate in energy bill strike campaigns.
A movement called Don’t Pay has urged people to cancel their gas and electricity direct debits from Oct. 1. Thousands of people have already pledged their support.
In an interview with BBC Radio 4’s Today programme, Chief Executive Jonathan Brearley said: ‘I know everyone is extremely concerned about paying their energy bills, but I would absolutely not encourage anyone to join a campaign like this for two reasons.
“First of all, it drives up costs for everyone across the board. And secondly, if you’re having trouble paying your bill, it’s best to contact your energy company.’
He added: “I wouldn’t encourage anyone not to pay their bill because that will only damage things further and it will affect them personally.”
Ofgem Chief Executive Jonathan Brearley (pictured) has said people should not participate in energy bill strike campaigns
Don’t Pay said, “Millions of us won’t be able to afford food and bills this winter. We cannot afford to let that happen.
“The plan is simple. We demand a reduction in energy bills to an affordable level. We will rally a million people to pledge not to pay if the government goes through with another massive hike on October 1.’
The group added: ‘Mass default is not a new idea, it happened in the UK in the late 1980s and 1990s when over 17 million people refused to pay the Poll Tax. .
“Even if a fraction of us paying by direct debit stops paying, it’s enough to get energy companies in serious trouble, and they know it. We want to bring them to the table and force them to put an end to this crisis.’
A Don’t Pay spokesperson told ELN“Ofgem’s abnormal failure to regulate the energy market and protect consumers over the past decade is one of the reasons we are in the state we are in.
“We are facing a catastrophe this winter. Millions will not be able to afford to keep their homes warm and that will lead to thousands of people freezing to death.
A movement called Don’t Pay has urged people to cancel their gas and electricity direct debits from Oct. 1. Thousands of people have already pledged their support
“The only way we can prevent this is if millions of us refuse to pay these extortionate prices and jointly force Ofgem and the government to act in the interest of the people and not the energy industry.”
It comes as Ofgem has confirmed that its energy price cap will be updated quarterly, rather than every six months, as it warned customers are facing a “very challenging winter ahead.”
The energy regulator said this switch to every three months means that “the prices charged to bill payers better reflect current gas and electricity costs.”
Ofgem added that this will also “allow energy suppliers to better manage their risks, creating a safer market that helps keep costs down for everyone.”
The London-based regulator claimed the change in timing when the energy price cap is updated “will contribute somewhat to the stability needed in the energy market”.
A forecast from Cornwall Insight shows energy price cap to remain above £3,300 from October until at least early 2024
Changes in the price cap come as household energy bills are likely to remain at more than two and a half times pre-crisis levels until at least 2024, according to the latest forecasts.
Cornwall Insight, one of the country’s most respected energy consultancies, said bills will be a whopping £3,359 a year for the average household from October, and won’t fall below that level until at least the end of next year.
The energy bill price cap, which regulates what 24 million British households pay, will be £3,616 from January and rise further to £3,729 from April.
It will then start to decline, but only slowly, to £3,569 from July before reaching £3,470 for the last three months of 2023.
What reasons does Ofgem give for changing the frequency of the energy price ceiling?
Ofgem today published this list of what it describes as “the broader benefits of a quarterly price cap”:
- “The energy market is now moving much faster, so six months is too long and it is not sustainable for people to pay a rate of up to six months”
- “Every six months means either consumers will pay more than the current rate for months if wholesale prices fall or suppliers will have to sell gas for months at a loss if wholesale prices rise, at the risk of suppliers collapsing, costing all consumers more money.”
- “It also just delays the inevitable and means bigger changes twice a year instead of smaller changes four times a year.”
- ‘In the meantime, suppliers could go bankrupt with enormous inconvenience and extra costs for consumers’
- “The ceiling cannot keep prices artificially low, but it can prevent rapid fluctuations, which we have seen in the wholesale market, from being passed directly to the consumer and ensure that prices do not rise quickly, but fall slowly – the quarterly price cap.” will get stronger this further’
- ‘Reduces the need for backwardation as the price cap can more accurately reflect current wholesale rates’