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| Millions of Britons are overpaying for energy, says competition report | Millions of Britons are overpaying for energy, says competition report |
| (about 2 hours later) | |
| A long-awaited report by a financial regulator into the energy market blames customers as much as companies for paying £1.2bn too much a year for their power. | |
| Millions of householders could each save up to £160 a year by switching to a new breed of lower-cost provider, the report argues in a finding described by consumer groups as a “damning indictment” of corporate profiteering. | |
| But the Competition and Markets Authority (CMA) has resisted calls from fuel poverty campaigners and others for a break-up of the big six energy companies but does suggest there could be a need for a transitional price cap on high-cost tariffs. | |
| The watchdog also recommends a price comparison website should be set up and run by the energy regulator, Ofgem, and argues for the need to scrap a recently introduced measure to restrict the number of tariffs on offer. | |
| However, the CMA’s most critical comments come in an assessment of the way the large utilities have benefited at the expense of their customers. | |
| “The initial findings of this [CMA] analysis suggest that average prices offered by the big six firms over the period 2009 to 2013 were around 5% above the competitive level in the domestic segment ... this amounts to domestic customers paying around £1.2bn … more on an annual basis.” | |
| Richard Lloyd, executive director of consumer group Which?, called for immediate measures to protect householders. | |
| “This is a damning indictment of how the energy market is failing consumers, with the biggest suppliers taking advantage of millions of households who have also been hit with the costs of government energy policy. | |
| “Now that we have a clear, official assessment of what’s wrong, we want the regulators to work with consumers to make sure their reforms will be effective this time. | |
| “In the meantime it’s right to put in place strong extra protection for consumers who don’t, for whatever reason, get a fair and competitive price. | |
| Gillian Guy, Chief Executive of Citizens Advice, said the report proved the energy market had failed the overwhelming majority of customers. | |
| “Consumers don’t trust the relationship between prices and profits. Millions are locked out of the benefits of the competition that exists.” | |
| “The CMA needs to provide a framework that gives customers confidence that they are not getting a raw deal and protects the interests of all consumers, including those who cannot or do not switch. | |
| The report has been met with relief by the big six energy suppliers which include British Gas, E.ON and SSE. Lawrence Slade, chief executive of the industry lobby group Energy UK, said the report showed no profiteering had been going on. | |
| “The energy industry recognises the need to put customers first while delivering secure, affordable and cleaner energy. Customers have not been over-charged but money may still be saved when people shop around for deals that suit their individual circumstances,” he said. | |
| Meanwhile Amber Rudd, the Secretary of State for Energy and Climate Change , welcomed the report. “Our priority is to keep bills down for hardworking families and businesses across the country. We’ll consider the report and respond soon and we won’t hesitate to take further action where the market is not delivering a fair deal for consumers – including doing more to support switching, ensure the swift roll-out of smart meters and increase competition in energy markets”. |