From The Daily Sceptic

By Paul Homewood

The new energy price cap is announced. The BBC reports:

Typical household energy bills will fall by 7% in April, regulator Ofgem has announced, following a shake-up in charges by the Government.

Nearly everyone in England, Wales and Scotland will benefit from a cut irrespective of their tariff, although the amounts will vary between households.

For millions of households on variable tariffs governed by the price cap, the drop will be about £10 a month for those using a typical amount of gas and electricity.

However, prices are still about a third higher than before the war in Ukraine, debts have ballooned, and billpayers are being urged to shop around for further savings.

The 7% fall in the price cap is the biggest drop since last summer. While the Government promised a £150 a year reduction in April, the cost of running the energy network is up, leading to a lesser saving of £117 for a household using a typical amount of energy.

The BBC is being particularly dishonest when it says “prices are still about a third higher than before the war in Ukraine”. The clear intention is to portray the Ukraine war as still keeping gas prices elevated. The figures show this to be false.

Firstly, energy prices were extremely low in 2020-21 because the pandemic lockdowns reduced demand.

But if we go back to the first Ofgem price cap, January to March 2019, we see that gas prices have barely risen since in real terms:

Although domestic gas bills have increased from £523 a year to £766 under the new cap for April, nearly all of this explained by general inflation. However, electricity prices have risen 65.4% despite inflation (RPI) only rising by 43.7%.

Clearly gas prices cannot be the reason why electricity prices have far outstripped general inflation.

Electricity prices are high for one reason and one reason only – Net Zero policies. In fact the new cap understates the impact of Net Zero. The new cap takes £130 of renewable subsidies off electricity bills and instead puts the cost onto taxation, or more accurately, Government borrowing to be paid back by future generations.

Without this shuffling costs around onto general taxation, electricity bills would now be £1,005, or 90% higher than in 2019.

First published on Paul’s blog, Not a Lot of People Know That.