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Flint urges government to introduce safeguard tariff

energy-newsFormer Labour shadow energy secretary Caroline Flint has shown her support for the CMA’s safeguard tariff remedy and urged the government to introduce it.

She implored energy secretary Amber Rudd to get the ball rolling naming the proposal as the answer “to bring an end to overcharging by the big six”.

She said: “A protected tariff would make sure that no household is ripped off on their energy bills, and I am calling on the government to put five years of inaction behind them and back this approach.”

A little dig at the Conservatives there from Flint. I’m afraid we don’t agree with you either. The safeguard tariff could stop competition and innovation in the energy market. It may even stop customers from switching ever again as they may be happy to pay slightly higher prices to avoid the hassle of switching suppliers.

Flint’s opinion then is not widely shared within the energy industry, not least with the suppliers. There has already been some controversy over the CMA findings particularly their accusation that the Big Six have overcharged households by £50. Centrica argued that the profitability analysis was under par and “not sufficiently robust” to support a conclusion that excessive profits were being earned in the energy sector and Npower have called for further work to be carried out to back up the findings.

Smaller supplier Haven Power suggested that a safeguard tariff should only apply to the big six because the customer base of the independents are, by their nature, made up of customers that have already actively switched.

It appears that Flint may be backing the wrong horse here. The government should be encouraged to improve awareness of the energy industry and switching process to educate consumers to a point where they can make informed decisions on their own rather than creating a safeguarding system, which is purely for damage limitation.

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