From 1 July, millions of households in Britain will face another rise in gas and electricity bills. Ofgem has announced a 13% increase in the energy price cap for the period from 1 July to 30 September 2026. For a typical dual-fuel household paying by direct debit, the annualised bill rises from £1,641 to £1,862—around £221 more a year, or about £18 a month.
This comes on top of rent, food, council tax, transport and debt repayments. For working-class households, energy is not a lifestyle choice. It means heating, cooking, washing, lighting, refrigeration and keeping children, elderly people and disabled people safe. The answer is not to lecture people to ‘use less’. The answer is to attack the system that makes a social necessity unaffordable.
What is the price cap
The misnamed ‘price cap’ is not a cap on the total amount a household can be charged. It limits the unit rates for gas and electricity, measured in kilowatt hours, and the standing charges paid each day to stay connected. The more energy a household uses, the more it pays.
The July rise falls especially hard on gas. Average direct-debit electricity unit rates rise from 24.67p to 26.11p per kWh, while gas rises from 5.74p to 7.33p per kWh. In plain language, gas is rising far faster than electricity. That exposes the weakness of Britain’s energy system: millions of homes are still heated by gas, and electricity prices are still shaped by gas markets.
Gas markets, war and speculation
Ofgem blames the rise on higher wholesale gas prices driven by international instability and war in the Middle East. That is an admission of failure. There is no reason for domestic heating and electricity bills to be tied to speculators betting on global fossil fuel markets.
Britain’s dependence on privatised energy markets means every international shock is passed onto household bills. When gas prices rise, markets panic, and energy traders bet on scarcity—it’s workers who pay. But when the system stabilises, prices do not return to anything like the levels working class households can afford.
This is reinforced by Britain’s wholesale electricity market. Electricity is usually priced through a ‘marginal pricing’ system: cheaper sources such as wind and solar are used first, but the market price is set by the last and most expensive source needed to meet demand. In Britain that is often gas. So even when renewable electricity is cheaper to produce, the price paid for electricity can still be pushed up by the cost of gas. This is not a natural law. It is a market rule, designed for competition and investor returns, not cheap energy as a public good.
Bills versus wages
The new typical annual bill of £1,862 is equivalent to about £35.80 a week. On the latest ONS average weekly earnings figures—£749 total pay and £693 regular pay in March 2026—that is roughly 4.8% of gross total weekly pay, or 5.2% of regular weekly pay, before tax, rent, travel and other bills.
For low-paid workers, pensioners, benefit claimants and households in poor housing, the share is much higher. Ofgem’s annual figure masks the lived reality: energy bills arrive as a weekly deduction from wages that are already being eaten away by essentials. Nominal pay has risen, but real regular pay growth is barely above zero. Energy costs remain elevated, and any new rise wipes out pay gains for millions.
Where the money goes
The bill does not simply go into the pocket of one retail supplier. Part of it goes to buying gas and electricity on wholesale markets. Part of it goes to network companies for infrastructure maintenance. Another part goes to supplier operating costs, debt costs and regulated profit. Part goes to VAT and policy costs. Part goes to managing the debts created by previous unaffordable bills.
Ofgem’s price cap also includes technical allowances such as ‘headroom’ and ‘levelisation’. Headroom is extra space built into the cap so suppliers can operate and compete below it. Levelisation spreads some costs between payment types. Even these technical items show the same problem: the cap is designed around preserving a regulated market, not providing accessible energy as a social right.
The political point is simple: workers are made to pay at every stage. We pay as billpayers, as taxpayers, as workers whose wages are held down, and as users of public services starved of funds while private energy capital is protected.
Profits through the whole chain
Energy profiteering is not confined to especially mercenary operators. The whole privatised chain is organised around profit: oil and gas producers, electricity generators, traders, network operators, suppliers, financiers and shareholders. The End Fuel Poverty Coalition estimates that 30 firms heavily involved in Britain’s energy system made £23.1 billion in reported profits from UK operations in 2025—equivalent to almost £800 for every household in the country, or more than £15 a week.
Consumer groups and centre-left think tanks have proposed various reforms: Common Wealth, for example, argues that stopping gas from dictating wholesale electricity prices could save households around £200 a year, while the New Economics Foundation proposes giving all households a set amount of energy. These proposals recognise real failures in the present system, but the problem isn’t poor regulation, it’s the fact that energy is treated as a commodity and investment asset rather than a social necessity. So long as suppliers, generators, network operators and producers remain in private hands, every reform will be bent around preserving investor confidence, protecting profits and passing costs back to workers in one form or another.
Labour and the unions
The Labour government says it wants clean energy, greater energy security and a break between gas prices and electricity prices. Reducing dependence on gas and weakening marginal pricing are necessary. Moving some levies off bills can give limited relief. But Labour’s approach remains trapped inside the market: subsidies, regulated incentives, public guarantees for private investors and temporary bill relief, rather than direct public control.
The Tories and Reform offer no alternative. Their answer is more fossil fuel dependence, deregulation and attacks on climate policy. That would leave workers even more exposed to global gas shocks while sabotaging the transition we need.
Unite has rightly called the price cap rise a blow to workers and families, demanding an immediate deep cut in the cap and a plan to renationalise energy. That line should be taken up across the trade union movement. But press statements are not enough. Union leaders should organise a national campaign linking bills, pay, public ownership and climate jobs.
Make the profiteers pay
Workers Power says the price cap rise must be reversed. We need a real cap on household bills, funded by taxing energy profits and wealth. Household energy debt should be cancelled. Forced prepayment meters, disconnections and debt collection for energy arrears should be banned.
Wages, benefits and pensions must rise automatically with the real cost of living. The books of the energy companies, network operators and suppliers should be opened to public inspection.
But immediate relief is not enough. Energy must be decommodified: taken out of the market and treated as a social necessity, not a source of rent, speculation and shareholder returns. That means nationalising suppliers, generators, networks and major producers, without compensation, under workers’ and consumers’ control.
A democratic plan for energy would have to go beyond electricity and gas. Water, land use, housing, transport and infrastructure must also be brought under public ownership and coordinated planning. Only then can society use the wealth now swallowed by profits, dividends and debt payments to insulate homes, install heat pumps, expand renewables, upgrade the grid, protect water resources and create skilled unionised jobs. The same plan must meet climate targets at home and contribute to international climate justice: funding adaptation, restitution and support for those displaced by climate breakdown caused above all by the imperialist powers and fossil fuel corporations.
Trade unions, tenants’ groups and community campaigns should build local cost-of-living assemblies and coordinated action around this programme. The choice is clear: workers pay for another fossil fuel price shock, or the profiteers are expropriated and energy is planned democratically for human need and ecological survival.