17 January 2007
Consumers proved they were no longer prepared to stand for poor service and unreasonable price rises last year with over four million of them switching their energy supplier, according to the industry regulator Ofgem.
This figure was more than 750,000 up on 2005 and while consumers are the clear winners, saving £150 per year on average with their new, cheaper tariffs, the loss of business is hitting some companies hard, not least British Gas, whose market share fell below 50% for the first time.
Chief executive of Ofgem, Alaistair Buchanan, said that it was clear that Britain had the most competitive energy market in the world, adding: "Energy customers have given expensive suppliers the boot with over four million moving to a cheaper supplier in the first ten months of 2006."
He also confirmed that the regulator would continue to encourage suppliers to bring their prices down, following the announcement that the wholesale price of energy had begun to drop.
"While British Gas has already indicated that it will be cutting prices this year, Ofgem will be watching all energy suppliers to make sure they compete as wholesale prices fall as hard as they did when prices rose," he said.
This should ease the minds of consumers who are worried about the effect yesterday's inflation rise announcement will have on their energy bills. Pensioners in particular, will be left feeling vulnerable since energy bills are now estimated to make up to 44% of a pensioner's annual income.
Ann Robinson, director of consumer policy at uSwitch.com, commented: "There is no reason to delay these price reductions and uSwitch.com will be watching to see whether prices fall across all tariffs. Whether it will be enough to ease the burden on pensioners and other vulnerable groups remains to be seen."