After the Competition and Markets Authority (CMA) report on the energy market and its issues was published in July, the investigation has entered a period of consultation upon its proposed remedies.
Energy suppliers have been falling over themselves to comment on the remedies after the initial findings shed them in a fairly positive light. The CMA declared the Big Six innocent of any collusion that might monopolise the market.
However, these remedies have divided opinion and brought about wide scale discussion. So what are the biggest bug bears for our energy suppliers then?
The Safeguard Regulated Tariff caused the most controversy with the CMA suggesting that all ‘disengaged’ customers are to be protected from high standard variable tariffs. While many have embraced the idea, there’s growing concern that would tamper with the energy market and damage investor confidence.
We believe that this is a reactionary proposal. Surely we should be educating consumers on the energy market and how best to get a deal not limiting the amount they get ripped off because they can’t be bothered to switch?
Not to mention, how will the price ceiling be agreed upon? How much can suppliers charge above operational costs and how long would such a tariff be in place for? Will this apply only to the Big Six or all suppliers?
And will this stop customers from switching ever again as they are happy to pay slightly higher prices to avoid the hassle of switching suppliers?
Once again, we’d suggest advertising campaigns are required to educate consumers on their switching rights and the savings that are there to be made.
We do however agree with the removal of the four tariff cap as is the general consensus in the energy industry. This should increase tariff offerings and innovation in the market.
However, concerns still remain around the return to an overly confusing marketplace that could potentially disengage customers further. An influx of new tariffs could also make full market coverage difficult for price comparison websites, giving rise again to the suggestion of an Ofgem-run price comparison website which is impartial. We hold some scepticism over this one…
As an impartial broker, we can give our customers advice on the best energy deal for their business. For a free quote, give Business Juice a call on 0800 051 5770.