It is unlikely to end the energy price debate, though. Consultancy Cornwall has forecast, based on Ofgem’s own methodology, that recent rises in wholesale price will inevitably push up the level before long.
When their bills go up, customers are bound to feel short-changed about prime minister Theresa May’s election pledge to cut £100 off the average SVT bill. However, setting a cap gives ministers a short breathing space to start moving the energy bill debate onto a more sustainable footing than what many insiders see as a sticking plaster solution.
There has been little follow-through on May’s pledge of a 50 per cent improvement in the energy efficiency of new and existing buildings.
That commitment sat oddly with the proposed £2,500 cap on the amount private landlords would have to pay to bring properties up to Energy Performance Certificate (EPC) band E level. Given the fat profits many have made in recent years, such a low cap looked like a sop to a vested interest. However, this week the cap was raised to £3,500, affecting nearly half of the 290,000 or so properties currently in the F and G bands – up from a third under the previous proposals. It’s a small signal that the government is ready to take tough decisions to promote long-lasting reductions in energy bills.