The regulator confirmed to Sky News that Christine Farnish resigned from the board after disagreeing with the rest of its board over how long energy suppliers should have to recover from the current high energy prices. It wanted suppliers to claw back those prices, which are a condition of the price cap, over 12 months to pass the cost on to customers. However, the rest of the board, Ofgem said, wanted this to take place over six months as it said it would reduce the “very real risk of supplier collapse”. Ms Farnish, who has been a non-executive director since 2016, told The Times she resigned because she did not believe Ofgem “had struck the right balance between the interests of consumers and the interests of suppliers”. This month, Ofgem announced it was changing its cap methodology to allow suppliers to recover wholesale energy compensation costs sooner. Ms Farnish said she believed the move would “add several hundred pounds to everyone’s bill to support a number of suppliers over the coming months”. Analysts at Investec estimated the change in method would add more than £400 to the level of the price cap in January – taking it to £4,200 a year compared to £1,971 today. Ofgem said: “We are grateful to Christine for her many years of dedicated service to Ofgem. “Due to this unprecedented energy crisis, Ofgem has to make some incredibly difficult decisions where carefully balanced trade-offs are constantly being weighed. But we always prioritize the needs of consumers both in the immediate and long term. “The rest of the board decided that a shorter recovery period for energy costs was in the long-term interests of consumers, reducing the very real risk of supplier collapse, which would pile even more costs on bills and add unnecessary worry and concern. in an already very difficult moment”. The cost of living crisis has dominated the Tory leadership campaign as households feel the squeeze, but Boris Johnson, Richie Sunak and Liz Truss have so far ignored calls to sit down and find a solution to help people before a new prime minister is chosen on September 5. Ed Miliband, Labour’s shadow climate change secretary, accused the government of being “asleep at the wheel” after Ms Farnish resigned. “This is further evidence that the government is asleep at the wheel when it comes to the energy bill crisis,” he said. “For 12 years the Conservatives have completely failed to regulate the energy market. No other country has had 32 energy suppliers collapse. “We cannot simply allow the British people to suffer further bill increases. It is unacceptable that the Conservatives continue to not offer solutions to this crisis and oppose Labour’s plan. “Labour’s fully funded plan will fix the problems now and for the future. It would mean people won’t pay a penny more on their energy bills this winter, saving the typical household £1,000. Only Labor can give Britain the fresh start it needs.”
