Ian McCaig, deputy chairman of First Utility, looks at a long-term solution to saving money on energy bills.
This week, yet again, we’ve seen optimistic headlines about moves within the energy industry to give consumers a better deal.
Disappointingly though, a lot of it seems to be false hope. But who can blame energy consumers for searching for shards of hope when things look so bleak? Rising wholesale prices, a raft of recent price rises by the ‘Big Six’ energy suppliers and an uncompetitive market dominated by the same six companies offering consumers little differentiation or choice.
The end result is that consumers are finding it increasingly difficult to control their energy bills and spend.
With winter fast approaching, the cost of energy is on everyone’s mind and it’s no wonder when you consider the recent uSwitch survey that shows that almost a third of consumers (32%) say that energy is already unaffordable in the UK.
Whilst the Government has recently announced plans to review the energy marketplace to ensure greater competition, here at First Utility we believe it’s time for more urgent action. It was with this in mind that this week we launched a ‘Manifesto for Modernising the UK Energy Industry’ to outline key actions that will allow consumers to get the deals they deserve.
There is a lack of competition in the energy industry with the ‘Big Six’ controlling over 99% of the market.
With this kind of structure, the market will continue to work against the interests of consumers and will lead to higher prices unless there is significant reform.
To take action on the ‘Big Six’, we want Ofgem to address the issue of predatory pricing. The ‘Big Six’ are taking advantage of disengaged customers and blocking competition, reducing consumer choice and creating in essence a vicious circle which prevents the growth of newer entrants. This behaviour is anti-competitive, and we also suspect in breach of Ofgem licence conditions.
We also believe there needs to be a greater impetus on a range of other issues such as the national roll-out of smart meters. Smart meters give households the ability to manage their own energy consumption which is critical at a time when the consumers are facing rising energy bills.
All in all there needs to be more action, and urgently. Consumers deserve more choice and a better deal when it comes to energy. We’re here to shake-up what is an outdated energy industry, to give customers greater visibility of energy usage and therefore put them in control.
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