THE so-called energy regulator Ofgem announced on Friday that it is raising its price cap. This will impact about 15 million people. Those on a default tariff will see a rise of £139 per year and those on prepayment meters an increase of £153.

This price rise is on top of the end of the furlough scheme and a £20 per week cut to Universal Credit, due to be axed next month. This will plunge millions into fuel poverty and give people the choice of heating or eating.

The propaganda is that this price hike is because of “the free-market” rise in the energy wholesale price. The “free-market” is a mythical concept that is invoked to defend the indefensible. It’s also not true as some suppliers like EDF, Centrica and Scottish Power are also producers of energy.

The out-of-control energy prices have their beginnings in the 1970s. An academic named Dr Stephen Littlechild came up with the idea of a “free market” in electricity. The fact that this concept was against economic theory and would not work did not deter him. Margaret Thatcher introduced this madness under the advice of her energy secretary John Wakeham.

In 1985, the first time ever anywhere in the world, a power company (Enron) could charge what it wanted for electricity. The theory was that this privatisation would lead to ruthless competition that would see prices drop. However, what this madness led to was a cartel of energy companies getting together to get the price to rise. Many investors saw their returns increase by 400% overnight.

Wakeham was elevated to the Lords and ended up on the Enron board. Littlechild was made the regulator for the new energy market by Thatcher. He ended up on the board of an Enron subsidiary. Enron collapsed in 2001 due to fraud and corruption.

Thatcher’s free-market madness is why energy prices have continued to rise for 30 years. It’s the effect of her anti-union policies that have led to the collapse in wages and rise in house prices.

Alan Hinnrichs