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Government must go further to fix the broken energy market

Single unit price is needed to spot cheapest deal

Houses of Parliament

Proposed amendments to the government’s Energy Bill, which include reducing the number of energy tariffs available to consumers, do not go far enough to fix the broken energy market.

Executive director, Richard Lloyd, said: ‘We want the government to introduce a single unit price for energy that would apply to all tariffs to allow people to spot the cheapest deal at a glance.’

Bamboozling energy tariffs

The government tabled new clauses to the Energy Bill today, in plans it says will help consumers get a better deal on their energy bills.

Energy secretary Edward Davey said: ‘We will amend the Energy Bill to reduce the bamboozling array of tariffs available on the market and to simplify bills, whilst continuing to work with Ofgem to deliver a simpler, more competitive market.’

The amendments are prompted by the Prime Minister’s promise to legislate so that energy companies are forced to give customers their lowest tariff.

Simple tariffs, easy switching

Which? argues that the government’s proposals need to be beefed up with radical new measures to increase competition in ways that can keep rising energy prices in check.

We found only one in 10 people could identify the cheapest energy deal when presented with a range of standard energy tariffs. And yet when shown the tariffs in a simpler form, as petrol prices are displayed on forecourts, the number shot up to nine out of 10.

We are calling on the government to introduce a single unit price for energy and make it easier for consumers to switch to the cheapest energy deal.

The Imbalance of Power

Our report, ‘The Imbalance of Power’, published in December 2012, lays bare the full extent to which the retail energy market is failing consumers. It called for:

  • The introduction of a single unit price so that energy prices and new deals can be easily compared at a glance – just like they are on petrol forecourt displays –  allowing people to find the best deal with ease;
  • Changes to improve the switching process, including cutting the time it takes to switch, to make it quicker and easier for consumers to move to a better deal; and
  • For energy companies to make all tariffs available across all payment methods.

These measures, together with the Prime Minister’s energy commitment, should make competition work and keep prices keen.

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