Energy profits linked to failing price cap, says Uswitch
Richard Neudegg, director of regulation at Uswitch.com, comments: “When looking at profits in the energy retail market, all roads lead back to the price cap.
“Over 29 million households are currently on tariffs set by the price cap. Because of this, suppliers are led to pricing in almost exactly the same way, underpinned by similar hedging strategies.
“The strong supplier profits now possible under the energy price cap - as part of the current regulatory environment - are driving increasingly fewer incentives for suppliers to innovate and offer cheaper, competitive deals that could bring prices down.
“Blunt interventions including the energy price cap are proving to be a death knell for a healthy competitive market, and would not protect consumers if we faced another crisis. We must reform this system to bring back pressure to do better for customers.
“It’s time to move on from the price cap. Instead, policymakers should consider a principles-based approach to ensure all suppliers offer a fair, transparent standard tariff that represents good value for money for households as well as giving them more choice.”
About Uswitch
Uswitch is one of the UK’s top comparison websites for home services switching, including energy, broadband and mobiles.
More people go to Uswitch to switch their energy, broadband and mobile than any other site, and we have saved consumers over £2.7 billion off their bills since we launched in September 2000.
Free mobile app Utrack also helps households manage their home energy usage and make potential savings.
Uswitch is part of RVU, a group of online brands with a mission to empower consumers to make more confident home services, insurance and financial decisions.