Ofgem being sued over 'devastating' 80% hike to energy price cap

A campaign group is planning to sue Ofgem over its 80 percent energy price cap hike as it would have a 'devastating' impact on UK households.

In response to the energy regulator's announcement that the price cap will jump to £3,549 this October, the Good Law Project is looking to take legal action alongside Fuel Poverty Action and the HIHAAW group.

Speaking about Ofgem's announcement, Jo Maugham, director of Good Law Project, said the news will 'devastate families'.

He added: "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 April, the energy price cap jumped from £1,277 to £1,971, leaving many households in a tricky position amid the ongoing cost-of-living crisis.

But the news that this will once again go up on 1 October by £1,578 - an 80 percent increase from the current price - means millions of households will be pushed into poverty.

But the Good Law Project is planning to take action, stating: "We will ask the High Court to ensure the regulator upholds its legal duties to, among other things, carry out an impact assessment that includes assessing the disproportionate impact on elderly people, children and people with disabilities, before confirming the price cap increase."

Many people are also calling on the government to step in, including Ofgem's chief executive Jonathan Brearley, who warned of the hardship energy prices will cause this winter.

Brearley said: "We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make.

"I talk to customers regularly and I know that today's news will be very worrying for many.

"The price of energy has reached record levels driven by an aggressive economic act by the Russian state.

"They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.

"The Government support package is delivering help right now, but it's clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year."

The Scottish Labour leader Anas Sarwar has said that the UK's 'zombie government' is 'nowhere to be seen' as people struggle with the ongoing crisis.

“I have struggled to contain my anger over the last week as we have seen Ofgem make these announcements on the new price cap and the government being a zombie government, nowhere to be seen and people in absolute despair across the country," he explained.

"Where the hell is our government? They should be out there right now cancelling this increase and making sure we are supporting families across the country.

"And they should also be giving more support to businesses who have no cap at all, meaning lots of businesses will go bust, unemployment will go up, families get pushed in destitution.”

Speaking on The Sunday Show on BBC Radio Scotland, Sarwar continued: “This is a crisis moment and both our governments have a moral duty to act."