Ofgem to be sued for failing to shield low-income households
Published 26 August 2022
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Campaigners are pressing ahead with plans to sue Ofgem on the grounds that the regulator has failed to mitigate the impact of this autumn’s increase energy bills on low-income consumers.
In response to Ofgem’s announcement on Friday (26 August) that the price cap on default tariffs will increase by 80% to £3,549 in October, the Good Law Project (GLP) said it is proceeding with legal action against the regulator.
Along with campaign group Fuel Poverty Action, the not-for-profit company will ask the High Court to ensure that before confirming the price cap increase, the regulator upholds its legal duties to carry out an impact assessment, including on elderly people, children and people with disabilities.
The GLP will argue Ofgem has the power to do more to protect vulnerable people and that before raising the cap, the regulator is legally required to provide evidence it has carried out a proper impact assessment and considered mitigation measures for the most vulnerable customers, including a lower price social tariff.
The practice has already sent Ofgem a pre-action letter, which put the regulator on notice of formal legal action, demanding protection for at-risk groups from the full brunt of rising energy costs.
The letter stated that the regulator has powers to impose a social tariff for vulnerable energy users under powers given to the sector’s regulators following privatisation in the 1980s.
GLP said a formal response to its letter was expected on Friday, but Ofgem’s announcement provided “no indication” that the requested impact assessment has been carried out.
Jo Maugham, director of GLP, said: “The announcement today will devastate families. Just who and what is Ofgem for? Do not be fooled. This is a choice. And the choice they’ve made is to let low-income consumers and small businesses bear the brunt of this crisis.
“We believe Ofgem can – and should do more. We intend to put the question before the High Court, and will ask for a fast-tracked timeline to reflect the urgency of this crisis”.
In interviews on Friday morning, Ofgem chief executive Jonathan Brearley called on the government to take “urgent action” to mitigate the price cap increase.
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