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Do the Big Six deserve their loyal customers?

Today is a watershed moment for the energy market. The Competition and Markets Authority has confirmed what we’ve known all along – competition isn’t working for consumers.

The Competition and Markets Authority (CMA) has published its initial thoughts from its energy market investigation, called for by thousands of Which? campaign supporters.

Energy market competition and prices

The CMA has found that the customer base of the Big Six is mostly made up of standard tariff customers, with many of these being with the same supplier for more than 10 years. This has left millions of people paying over the odds for their gas and electricity.

In fact, the CMA has found that 95% of Big Six dual fuel customers on standard tariffs could have saved between £158 and £234 each year by switching. In addition, those same customers are providing the suppliers with 12% more revenue than those on fixed tariffs, suggesting that loyal customers are subsidising other consumers. Competition clearly isn’t working in the energy market.

Energy supplier customer satisfaction

The CMA has also found that complaints have increased five-fold between 2007 and 2013, with a doubling of complaints to the Ombudsman in the last year. The report also points out that the Big Six suppliers did very poorly in our customer service survey in 2014.

What are we doing?

The CMA will now continue its investigations, and expects to publish its provisional findings in May this year.

As part of our Fair Energy Prices campaign we want the Competition and Markets Authority to develop a set of solutions to repair the energy market and make it work for everyone, not just the suppliers. This must include establishing a fair price that you can trust, to restore consumer confidence in the energy system.

People will also be looking to politicians of every party to set out how they’ll deliver fair and affordable energy prices in the future.

So what do you think of the CMA’s latest findings? Do you think the Big Six deserve their customers? Have you been a loyal customer that’s been paying a standard tariff for years? Are you now tempted to switch energy suppliers?

Do the Big Six deserve their customers?

No (89%, 232 Votes)

Yes (6%, 16 Votes)

Don't know (5%, 14 Votes)

Total Voters: 262

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Comments
Member

Well said John. Re-reading all the comments leads me to conclude the only workable solution is to break up the Big Six monopoly into smaller companies reducing their market dominance and introducing and encouraging more consumer choices and competition into the energy market. I am not sure about the political ramifications if this was implemented, but events taking place in May could be the deciding factor and I don’t particularly want to venture down that route.

Member

I find myself bewildered by almost all the above posts, between an unfortunately very small number of contributors. To me it seems extraordinarily simple, compare the offerings and choose the one that suits you.
There are apparently 24 providers so 18 are small, and their market share is growing, so no sign of the 6 large companies driving them out of business.
All the current cheapest deals are fixed for one year (or so) so why does anyone remain on a variable tariff? Especially as it gives you the security of knowing what you will pay each month.
Lets try to get as many new people to switch as possible.

Member

Bob: By virtue of their size The Big Six are able to offer the cheapest deals. I am in the process of switching at the moment and all the Comparison Sites offering the cheapest deals for me happen to be one of the big six. As long as this trend continues most people will understandably opt for the cheaper price on offer, but this does not solve the crisis in the energy market as it will ultimately set The Big Six back on course to dominate the market once again and back to square one when they will be in a position to control prices, keeping them artificially high, ultimately at the expense of consumers.

The only effective switching remedy as far as I can see is very impractical. For example if everyone switched to a smaller independent company and paid a little more in the short term, then the big six would lose their dominance, but this realistically is not likely to happen and so people will continue to opt for the cheaper Big Six offers and so the merry-go-round continues unabated……………………..

Member

Well, they have NEVER offered the cheapest deal for me – I keep looking as First:utility are forever bringing out new tariffs.
I just do not understand where this silly language of ‘crisis’ and ‘broken market’ is coming from. There is a market, it is up to everyone to make the best use of it for themselves. If for someone that means that a large provider is the best deal for them then they should switch and gain the benefit. If the new smaller providers offering better deals has spurred the larger firms into responding that is all to the good. Don’t put people off switching just for a principle.

Member

As well as the individual being able to choose the best deal for them and switch by phone or on the net there are also collective switching schemes organised, by e.g. local authorities. You express an interest, the collective response is put to the energy suppliers as an auction, the lowest tariff is offered to participants and you can switch to it if you choose.

It beats me why such a huge number never bother to try to reduce their bills. They may not think it worth the effort – that is their choice of course.

And please, before anyone berates me for ignoring the vulnerable, I do not. I want them to get all the help they need to get the best deal for them also. As I have repeatedly said.

Member

Ofgem are consulting on non-traditional energy supplier models:

https://www.ofgem.gov.uk/ofgem-publications/93586/non-traditionalbusinessmodelsdiscussionpaper.pdf

On the one hand I am all for innovation. On the other hand I would not like to see effort – Ofgem’s and CMA’s – diverted from sorting out the present 24 energy suppliers to get more transparency. Don’t bite off more than you can chew. I also wonder which will benefit the most consumers most quickly?

No doubt Which? will be offering its views to Ofgem?

Member

Scottish Power have just received a 12 day sales ban by Ofgem for failing to deal with customer complaints.
Source BBC News.

Member
Member
Jack says: