Martin Lewis's anger at Ofgem crossed a line, but it's a sign of growing concern about the energy regulator – Martyn McLaughlin

As someone who has carved out a niche as a family friendly consumer champion dispensing helpful tips and advice on prime-time television, the foul-mouthed outburst by Martin Lewis at the UK’s energy regulator was out of character. Which is not to say that it was altogether unwarranted.

Mr Lewis, the founder of the popular Money Saving Expert website, was among those being briefed by Ofgem about proposed changes to the energy price cap and what is known as the market stabilisation charge, when he could hold his tongue no longer.

The plans, he declared, amounted to a “******* disgrace that sells consumers down the river”. Later, having apologised for his intemperate language, Mr Lewis expressed his ire more calmly. He warned that the shake-up was tantamount to an anti-competitive measure and would prevent firms from introducing cheaper, fixed-term deals.

Ofgem, unsurprisingly, takes a different view. It says the changes will mean the price cap is more in tune with market prices, with any price falls passed on more quickly to consumers (the same also applies, it failed to mention, when prices rise).

Martin Lewis apologised to Ofgem for his outburst, but his anger is understandable (Picture: Jeff Overs/BBC/PA)

The regulator also argues that the shift allows energy suppliers to better predict their own energy purchases, reducing the risk of their collapse, with the stabilisation charge helping to keep the retail market on an even keel.

It is not a necessarily unwelcome move, but as Mr Lewis perhaps hinted at, it feels somewhat like Ofgem is slamming shut the stable door after the horse has bolted, and conveniently glossing over its own failings which have contributed to the crisis.

Its announcement put considerable emphasis on the “unprecedented market conditions” which have led to a surge in wholesale costs. There can be no doubt that is the major contributory factor behind the spike in household bills, but it is not the only one.

The failure of Ofgem to oversee a robust regulatory environment has been damning. It has contributed directly to the collapse of more than 30 under-capitalised energy suppliers. That in turn has led to higher bills for consumers in order to cover the cost to those companies taking on extra customers.

It is estimated that around £200 million was swallowed up as the firms fell in rapid succession. That money is now being paid back by households by surcharges on their bills. Indeed, when the price cap jumped by £693 back in April, some £68 of that increase was made up of the recovery of so-called ‘supplier of last resort’ levy costs – in other words, the costs for moving customers from failed firms like Green, People’s Energy, Utility Point, and Avro.

The latter firm is a particularly ignominious example of how Ofgem’s reluctance to intervene in the retail energy market has exacerbated the energy crisis.

Between 2018 and 2021, the company’s customer base expanded rapidly, nearly trebling from 210,000 to just under 600,000. But that breakneck growth was achieved on distinctly shoogly foundations.