Ofgem boss calls for a “more rigorous framework” to support households

In an interview with The Guardian, Jonathan Brearley said: “The price cap was designed for a market that was much more stable – so pre-2020 – and worked quite well. But in this volatile market, the price cap has costs as well as benefits, so we would welcome a debate on the future of pricing regulation.”

His call for the development of a “more rigorous framework” comes less than a fortnight before the regulator’s next price cap review for the final three months of 2023. There is now, however, a growing concern among some that the cap may be doing more harm than good in the market.  

Brearley explained: “It’s not for us to decide. It’s ultimately for ministers.  

“But it’s important that collectively we understand that a very broad and crude mechanism is going to have risks as well as benefits.” 

One option being discussed is that of a social tariff, which would be set below the cost of supplying energy, allowing for those in fuel poverty to better afford their bill. It’s an option that has been discussed between Ofgem and the government.

Brearley added: “I think we are clear that a more rigorous framework of providing support for customers is needed. But, in a sense, I accept that the government has a set of dimensions to think about that I don’t have to think about.”