Energy companies aren't setting prices. The price is set by supply and demand. Currently the Taxpayer has funded Bulb to the tune of £1.7 billion. How many more billions will it cost us? Help those that can't afford it and let others who can pay.
The Taxpayer LOST £33 Billion on RBS.
I get your point, perhaps the winter fuel payment could be dynamic based on the cost of energy, so e.g. this year instead of been £100 and something it should be £500 with the uncapped prices.
However things are not always that simple, there will be people who dont qualify for these payments (perhaps the bar set too low) who would be vulnerable with the out of control energy rises.
Ofgem have already said they going to change how they set the cap in future so situations like this become less likely, its going to lead to higher caps but would still be better than no caps.
Also letting some companies collapse isnt an industrial crisis, consumers are protected, they get moved to another company with their credit intact and dont get their supply cut off, that is the most important thing here. If the industry was in danger e.g. all the big companies were at risk, there would be no doubt the government would handle it differently.
If the cap wasnt in place I expect bulb etc. would still be in trouble, they would have had to raise their prices higher than the big companies, due to getting less favourable pricing on their short term deals, consumers would have migrated en masse as ofgem encourages people to keep swapping companies, and some would have financial problems, at best firing staff as they shrink, or perhaps still going into liquidation, albeit at a later date. Whilst at the same time the government would have been slaughtered for allowing prices to go out of control.
I think the few who collapsed within a few weeks would have still collapsed, as there is a lag between paying more wholesale and rising for customers (especially those on old fixed rate deals, cap unaffects those remember). I expect on the small suppliers the vast majority were on fixed rate deals which would need to expire, as those are the customers who are prepared to jump to get better deals.
I wouldnt be surprised if we see a new law where fixed rate deals can only be given if the supplier also has it fixed with their own supplier.
Ultimately it comes down to that these companies "gambled" on their wholesale costs staying low and lost.
