Has the energy price cap had its day?

theguardian.com:

Next weekend, Britain will experience its first August bank holiday unencumbered by Covid for three years. Notting Hill carnival will explode on to the streets of west London, Manchester will host Pride celebrations and a vintage steam rally should charm the punters near Looe in Cornwall.

But a nasty prelude threatens to puncture the nation’s mood before the festivities kick off: Friday’s energy price cap announcement. The energy regulator Ofgem is poised to update the public on the new level for the cap, which will be implemented on 1 October. Annual bills are currently capped at £1,971 and this is forecast to hit £3,582 in the autumn, a prediction which has been raised several times since the record summer cap was introduced in April.

The government is examining a suite of options to help consumers, and in particular vulnerable households, tackle rising costs. These include suggestions that the price cap may be frozen for a fixed period.

This week could also mark the beginning of the end for the cap, which has proved a divisive policy blamed for the collapse of nearly 30 suppliers during the energy crisis – most notably Bulb, which remains in government-backed administration.

The cap traces its roots to a Labour conference speech by then leader Ed Miliband in 2013, when he promised to impose a 20-month freeze on energy prices if elected. Despite Miliband being ridiculed, Theresa May’s government implemented the cap in 2019 in an effort to crack down on perceived profiteering in the energy industry.

“It was introduced to stop what ministers saw as gouging of loyal customers – whether that was happening, who knows, but that was the reason for its creation,” says Robert Buckley of consultancy Cornwall Insight. “It has forced