The Competitions and Markets Authority (CMA) energy report, released today, outlines action that will make switching energy tariffs easier for customers. It also includes a safeguard price cap for pre-payment meter customers.
The report also calls for regulator Ofgem to set up a database with details of customers who have been on their suppliers’ standard tariff for three or more years. Rival suppliers will be able to contact these customers with offers of better deals.
Which? executive director Richard Lloyd said: ‘After two years of this energy inquiry, there is still a long way to go before we will have an energy market that works for all consumers.
‘While it is right to ensure that vulnerable customers on pre-paid meters are quickly protected, there are many people struggling with their bills who will not be helped by this price cap. And the regulator must make sure that releasing customer data to rival suppliers is done so that it genuinely helps people switch from the most expensive tariffs to better deals, rather than result in more unwanted nuisance calls.
‘With the cost to consumers of an uncompetitive market now standing at £1.7 billion, we want all the energy suppliers to stop resisting change and start working harder to restore trust in their industry.’
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Are we better off in the new market?
Vulnerable customers will be protected from expensive tariffs under a new price cap on prepayment meter tariffs.
An Ofgem-controlled database will allow energy firms to contact customers who have been on their suppliers’ standard (also known as variable) tariff for three or more years. The idea is that energy firms will be able to contact these customers to offer them better deals.
However, the regulator needs to make sure that this initiative genuinely helps consumers to cut their energy costs, rather than exposing them to junkmail and nuisance sales calls.
The report also confirms that the CMA will ditch the recently-introduced rules that restrict suppliers to offering just four tariffs.
What do you think of the new changes to the energy market? Take part in our online debate.
CMA energy report: a long time waiting
The long-awaited report into Britain’s energy sector is the product of a two-year investigation.
The report is informed by energy market analysis and consultation with industry and consumers. It includes the survey results of nearly 7,000 domestic customers across Great Britain and feedback from tenants on the barriers they experience to switching.
The CMA is an independent non-ministerial government department. It carries out investigations into markets and the regulated industries, and enforces competition and consumer law.
Why are households not switching?
In its investigation, the CMA attempted to get to the bottom of why households are not switching their energy supplier.
Even though customers could save up to £400 by switching suppliers if they are on a Big Six standard variable tariff, switching levels are low.
Out of all households, 88% are still with the Big Six – leaving the remaining 12% the only customers on the market looking for a better tariff or better customer service.
Our latest consumer tracker reveals 63% of people in the UK are worried about energy prices, and only a third of people (34%) trust energy providers.
If you think you’re paying too much for energy or are fed up with poor customer service, don’t put up with it – switch your supplier.