Uswitch comments on the CMA’s provisional decision on remedies in the energy market
Commenting on the Competition and Markets Authority’s provisional decision on remedies in its energy market investigation, Richard Neudegg, Head of Regulation at Uswitch.com, says: “This report confirms what we’ve known for years – consumers have been paying billions of pounds over the odds for energy. The CMA is right to focus on ways to increase competition to fix the broken energy market, lower sky-high bills and improve poor service.
“Today’s suggested remedies are a step in the right direction but the reality is that consumers could be waiting until after next winter, or even the winter after that, to benefit fully from its final recommendations.
“The success of the final proposals must be properly evaluated once they’ve been implemented. Switching rates are a strong indicator of competition and so targets should be set to monitor those changing supplier, tariff and comparing deals as the reforms are put in place.
“In the meantime, the fastest and most effective way for consumers to save on their bills is by switching provider. Rather than waiting for long-awaited reforms to take effect, the average consumer could cut annual bills by a staggering £340, simply by switching now to a better deal.”
In response to some of the specific issues raised, Richard Neudegg adds:
Database of disengaged customers
“Consumers need access to information they can trust which gives them the confidence to access the market’s best deals. Proposals to share customer data between providers are well intentioned but could lead to consumers being inundated with unsolicited marketing material from multiple suppliers. This risks further confusion among customers, particularly the most vulnerable, and could also raise data privacy issues. We believe Ofgem could be better placed to use this data to directly encourage those languishing on expensive standard tariffs to switch. Proper safeguards would have to be put in place to protect customers.”
Temporary safeguard price control
“Better competition will help cut bills but it’s vital that the most vulnerable in society get extra support and protection. The introduction of a temporary prepayment safeguard price control will go towards helping some of the most vulnerable, but many low income families, elderly and disabled people pay by other means. It’s important that the Government extends the Warm Home Discount to all energy suppliers and deploys cash from winter fuel payments more effectively to help more of those in need.”
Removal of four core tariff cap
“The CMA is right to conclude that Ofgem’s four core tariff cap has actually restricted consumer choice. Relaxing these restrictions will benefit consumers by boosting innovation, choice and competition.”
Reforms to energy bills and annual statements
“Consumers need much clearer information to help them use less, waste less and pay less for energy. Ofgem’s reforms to overhaul confusing, over-complicated and ineffective bills and annual energy statements can’t come a minute too soon for customers.”
FOR MORE INFORMATION
Jason Wakeford
Phone: 0203 872 5612
Email: jason.wakeford@uswitch.com
Twitter: @UswitchPR
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