Thursday, 27 October 2016

Price caps are welcomed

Price caps are always welcome

The Energy Advice Line has welcomed hints from Prime Minister Theresa May that she will tighten rules governing energy prices and even extend price caps to protect more consumers.

"We welcome any measures that will bring suppliers into line and ease the burden on energy consumers," said Julian Morgan, managing director of the price comparison, switching and advice service.

"Suppliers have had ample opportunity to get their houses in order and start giving consumers a fair deal when it comes to prices.

"Although there have been some improvements, suppliers have continued to increase tariffs for some consumers by unreasonable amounts, in the face of falling wholesale prices. The government will now have to force their hand."

Following a two-year investigation into the UK's energy market, the Competition and Markets Authority (CMA) will soon introduce price caps for four million households that use pre-payment meters. The CMA's original proposals in 2015 would have protected more households, however, then Prime Minister David Cameron watered these down, and resitricted price caps to the most vulnerable energy users.

But Mrs May signaled at the Conservative Party Conference earlier this month that this protection did not go far enough. "It's just not right that two-thirds of energy customers are stuck on the most expensive tariff," she said.

Mrs May was referring to the vast majority of energy consumers who do not switch contracts or suppliers, remaining instead on standard tariffs that can be hundreds of pounds more expensive than the cheapest fixed deals.

"Huge number of consumers languish on the most expensive standard tariffs because suppliers do little to persuade them to move to something cheaper,"

Mr Morgan said, "After all, suppliers make most of their profits from customers who do this.

"Although it's also the responsibility of consumers to shop around for their energy and switch to the cheapest tariffs, suppliers should not be allowed to take advantage of those who don't.

"That's why we would welcome the extension of price caps to protect more consumers."

Mr Morgan added that the introduction of price caps would not obviate the need for consumers to shop around for energy.

"Shopping around for the best deals and switching suppliers accordingly will always lead to bigger savings than doing nothing and resorting to the protection of a price cap," Mr Morgan said.

The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.

The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice line for business energy customers.

For further information visit energyadviceline.org.uk