As OfGem announces a ‘new price cap’ (that seems to be moving suspiciously for something that is supposed to be still), The Chancellor tells people to use less energy.
The official announcement came today:
“Today (26 August 2022) Ofgem has announced the energy price cap will increase to £3,549 per year for dual fuel for an average household from 1 October 2022. “
OfGem 26 August 2022
Note on 16 May 2022 OfGem, the energy regulator, announced it was minded to review the price caps every six months. It then wrote to ministers announcing this
The Chief Executive of Ofgem wrote a blogpost update.
“The British people are dealing with a once in a generation price shock of a scale we have not seen since the oil crisis of the 1970s. A combination of factors ranging from post pandemic increases in demand, to the now clear impact of the Russian invasion of Ukraine, means we have never before seen the price pressures that households face today, likely getting significantly worse in Winter.”
OfGem, 20 June 2022
What’s the change?
Have a look at OfGem again from their group of charts here
Energy prices to suppliers that send us our bills moved from just over £50 per MW/hr to over over £250 per MW/hr.
The landing page of BBC News as of 5pm on 26 August 2022 spoke volumes.
We’ve been here before.
The Cambridgeshire Collection has original newspapers on microfiche (which can do digital screengrabs for you) …
…should you need to spend time in a building that doesn’t involve you paying the heating bills. Or in summer, the if you need to be somewhere that is air-conditions – as I spent much of the hot summer of 2018 inside their air-conditioned archive going through lots of old things.
It might sound like I’m joking but I’m not – this has been put forward as a serious option in recent days. This despite the widespread closures of libraries by Conservative-led governments as a result of their austerity programme – over 800 libraries gone in just under a decade.
It has reached the stage where people are now asking if the Conservatives have achieved ***anything positive*** for the many since David Cameron took office in 2010.
…as Cameron’s opponent in the 2015 general election, now Shadow Energy & Climate Change Secretary, Ed Miliband said:
It’s not just the public, but also businesses – of whom no help has been offered, that will be taking a hit. The massive fall in disposable income combined with a massive increase in their operating costs will mean we will see many closures. The knock-on impact will be raised social security payments, more write-offs for creditors of those businesses, rising unemployment, and lower tax revenue receipts. All of those put together makes the case for an emergency budget. For all the pledges of no such thing, events will surely force the hand of whoever Chancellor as of 05 September 2022.
Some of you may also be interest in this paper from May 2020 on OfGem’s assessment of the distributional impacts of economic regulation.
For example, what happens if everyone has a 10% cut in their energy bills?
Rich people in rural areas make the biggest savings on the grounds they have the biggest bills. Or so their explanatory note says. It changes if the policy is weighted towards those on the lowest incomes.
OfGem have also modelled for different incomes and lifestyles.
And perhaps most importantly, expenditure as a percentage of disposable income.
“Now is the winter of our discontent!” Full Stop.
…only there’s no one to save us.
Let’s also look at another historical speech. Here’s Major Attlee MP.
“I think the Prime Minister struck a rather different note; there was a good deal more of a note of excuse and explanation. No one of us wishes to give any handle to the enemy, but we have a service and a duty to the nation to perform in examining into the events that have occurred. We have to face facts. We are not afraid of facing facts. This is a reverse, and, let it be remembered, high hopes were raised, raised partly in the speeches of Ministers, but very much so in the Press and over the wireless.
There were statements made, and those statements were not contradicted—it might not have been possible to contradict them, but I cannot believe that the Government have no influence at all with the Press and the wireless by means of advice—and I think it was extraordinarily ill-advised that the people of this country should have had their spirits raised by accounts which encouraged ordinary people to imagine that everything was going wonderfully well and that we were having a wonderful success. There should have been more guidance. We are paying the penalty now, because after great expectations there is necessarily disappointment. It is no good trying to minimise the event. “
Rt Hon Clement Attlee MP (Lab – Stepney, Limehouse) House of Commons 07 May 1940,
The Leader of the Opposition that day could easily have been talking about contemporary events But he was talking about the debacle of the Norway Campaign that a few days later brought down Prime Minister Neville Chamberlain.
“We cannot go on as we are. There must be a change. First and foremost, it must be a change in the system and structure of our governmental machine.”
Attlee – Ibid.
I just cannot see either leadership candidate bringing about that much-needed change in the system and structure of government and of the economic system. Certainly not by what they have said in public at their party meetings that have been broadcast for all to hear.
“You will probably recognise the quote. When Prime Minister Harold Macmillan was asked what was the greatest challenge for a statesman, he replied: ‘Events, dear boy, events’. The same is true for most leaders and organisations.”
Sir James Bevan, CEO of the Environment Agency, quoting Harold MacMillan, 07 July 2020
And those events have already started.
Above – protesters in Glasgow burning their electricity bills.
Students of political history will recall that Margaret Thatcher’s hated Poll Tax was first implemented in Scotland – which kicked off the inevitable protests in response.
This is where we are – where ministers will be bounced into making policy decisions by events that are now out of their control – rather than having events shaped by the decisions they take.
Missing in action – or ministers gone AWOL?
As former BBC Journalist Rory Cellan-Jones wrote:
Above – no minister appearing to take the hit on The Today Programme.
As the Shadow Chancellor demanded to know, who is in control?
The paralysis in the face of an international crisis is shocking – I’m struggling to think of an historical precedence.
“Why hasn’t Parliament been recalled?”
Good question
…and one that a number of MPs have since been putting to the Prime Minister.
Problem is that unless the current Prime Minister makes that move (which seems unlikely given that he’s effectively a ‘lame duck’ PM awaiting his party to despatch him from high public office), Parliament won’t return until 05 September 2022.
Which at the point of typing is ten days away.
And they say 24 hours is a long time in politics.
And to make matters worse in what is a self-inflicted action, the Tories banned a Lobby-accredited journalist (i.e. someone accredited by Parliament as a journalist, and thus who has access rights that the general public don’t have – such as to the press gallery) from attending their hustings in Norwich. Surprising given that reporters don’t get to ask questions of the candidates.
…so as a result, the story of them being barred has reached far wider audiences than anything either of the candidates said in Norwich – and which makes the political party look even more nervous in the eyes of the public.
Which makes Emily Maitlis’s speech even more important about BBC News. The UK mainstream media must report without fear or favour. Collectively it has been failing in this regard. At some stage, their failures will only succeed in undermining their very own institution that is the fourth estate. As Sir Brian Leveson was charged with asking: Who guards the guardians? It feels like this question remains unanswered.
Food for thought?
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