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When will the government face its responsibilities on rip-off energy prices?

British Gas price hike

The price households pay for their gas and electric is proving to be a problem that won’t go away for the government, no matter how much tough talking they do on the subject.

Our latest data shows increased levels of concern for ever-growing prices. More than half of all people surveyed (56%) thought energy prices should be a key priority for the government – up by 5 percentage points from April.

The highest increase was in the 25 to 34-year-old age group, with the figure increasing by 14 percentage points (from 33% in April to 47% in September). Consumers aged 45 to 54 see energy prices as the biggest issue, with 63% saying the government should make it a key priority, up from 54% before the election.

With these shifts in priorities, it’s worth pausing to consider how we got here. The Competition Markets Authority (CMA) published its final report into the energy market in June 2016, finding that consumers had been ripped-off to the tune of £1.4bn a year due to high prices between 2012 and 2015.

Prices on the rise

Since then, prices have continued to go up. In fact, over the last 10 years bills have risen by more than 40% for gas and 35% for electricity. That’s a considerable chunk of a household budget for a product that, despite innovations in green energy, has more or less remained the same. But, perhaps more pointedly, popular anger reflects the less than satisfactory attempts by Ministers to address this consumer issue.

People are sick of the endless squabble about energy prices and want action now. Ministers say they are prepared to act. The government urgently needs to set out how it will make this broken market work for consumers.

While we’re waiting, the best thing you can do is to keep a close eye on your energy deal and make sure you switch to a good value deal.What do you think the solution is to the broken energy market? How many of you switched since the British Gas price increase was announced in August?

What do you think the solution is to the broken energy market? How many of you switched since the British Gas price increase was announced in August?

Comments
Guest
bishbut says:
16 September 2017

Some people expect to do EVERYTHING for them ! Thy should learn to do some things for themselves the government cannot do everything that some people expect or demand they do Anything the government does is a very slow process Some want things done immediately at once if not sooner or even before that I agree about energy they can do something but many things are your personal responsibility to do others can only partly help

Guest

Yes< you can do it personally but that still does not stop the greed of the energy companys', there is no question the market has to be controlled as a priority

Profile photo of DerekP
Guest

I’ve just switched from npower to Scottish Power .

Switching was easy because ScottishPower are members of the Energy Switch Guarantee scheme, so they did all the work for me, including the work of getting npower to play their part in the move .

Hence I do not agree that the energy market is broken.

Guest

I think when people are referring to a broken energy market its because of the greed that prevails in it.

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Guest

I’m afraid that, so long as we tend to vote Conservative and tend to want to live in a non-EU capitalist country, we are going to have to accept that ambition and to a certain extent, also greed, are going to be driving factors in our privatised industries.

That having been said, I still do not accept that the existence of greed proves that the market is broken.

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Guest

With you on the first paragraph Derek you are just being realistic . The second paragraph depends on how people view the word “broken ” , broken can be fixed in many cases so , in this case it can br fixed but wont be precisely because of your first paragraph.

Guest
bishbut says:
17 September 2017

One terrible supplier to another !

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Guest

As I see it, this Convo debate is based on sensationalist, rabble rousing journalism by W?C.

In summary, the header article claims that, prices are “high” and rising – so the market must be broken.

I think that is very poor logic and supported by little or no evidence.

For example, external factors (e.g. falling £ post-Brexit vote) and the costs of building new plant (solar plus on and off-shore wind) to replace still serviceable (but CO2 emission embargoed) coal fired stations may also affect pricing.

Energy prices should reflect generation, transmission and retail costs plus reasonable profits. If unreasonable profits are being taken anywhere, I doubt that it is in the retail sector, where we have about 40 companies competing for our custom – and thus offering cheap (loss leading?) fixed-term tariffs to attract new customers.

An inconvenient truth is that many households still waste a lot a energy, simply via poor standards of construction and insulation or by poor management practices (e.g. heating on but windows open for ventilation, lights and appliances needless left on).

Guest
Peter J. says:
16 September 2017

The whole of the energy supply to this nation is an absolute rip off. What the successive governments have done is remove the generating source from the end user and replaced the direct billing with a costly paper exercise which isn’t benefiting any consumers. The person who thought this stupid situation up must have had an absolute nightmare; that is in fact what has been the result. The mad Thatcher led race to privatisation has resulted in increased costs in every single source including water. Privatisation isn’t the answer. In the main it increases bureaucracy, political meddling, added profit taking, with the inevitable overall increase in costs. It is time to get back to basics across the whole spectrum of domestic and social costs to the nation and take dramatic and radical changes for the benefit of the nations people.

Guest

I have a smart meter with British gas which gives me free electric on Sundays until March 2018 so I won’t be switching until that ends , there are just the two of us and we use electric constantly on the free Sunday ,washing , tumble drying, bulk cooking and use electric heaters on that day . After that date we will look into cheaper options. Sunday has become a busy day for us lol

Guest

I have just switched from BG because I found their price increase unacceptable. They kept harping on about all these rewards they were offering but it is not rewards people want its affordable energy. One consolation at least we are safe in the knowledge the BG CEO has still got million pound wages, what a relief.

Guest
Helenlou24 says:
16 September 2017

I cannot really see any point in changing from one company to another, because they are all greedy toads and even when they tempt people to change with promises of better tariffs it is just to reel people in.

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Guest

I totally agree with you that is why I never bother to switch

Guest
bishbut says:
17 September 2017

Have you ever tried the smaller suppliers Many are a lot better at looking after you A plug consider OVO

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Guest

Surveying 2000 people and then extrapolating to the nation should be treated with some caution as the recent elections have shown.

I was wondering if asking people about heating costs and their concern is in anyway connected to the weather at the time you ask. And of course heating costs worries in April with the summer coming are very likely to be less than when seeing winter approaching.

The world as a whole has been faced with rising energy prices and as energy is a world market there are limits to what any Government can do – if it is a member of the World Trade Organisation. Perhaps it would help readers appreciate it is a global problem if the price rises in other countries were mentioned in this article.

What the British Government CAN do is stop adding green charges to bills and then getting the power companies to take the blame. Which? could explain about that.

Which? might also usefully do articles on window shutters, heat exchange pumps, and air exchange units that can recover up to 94% of the heat contained in the air that you exchange for fresh air into the house. For healthy air around four times an hour.

Over the last three years Members have suggested that Which? employ people equipped with thermal energy cameras to help subscribers see if their home are leaking expensive air by accident.

Many modern builds have been shown by heat mapping to be improperly insulated as much as older properties can be. A BBC article says that people shown heat maps are far more motivated to actually do something – Which? can copy the concept.

P.S.
“How many of you switched since the British Gas price increase was announced in August?
What do you think the solution is to the broken energy market? How many of you switched since the British Gas price increase was announced in August?”

Perhaps just asking once would be sufficient in three sentences at the end of the article.

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Guest

A link to the 2016 report by the CMA
gov.uk/government/uploads/system/uploads/attachment_data/file/531204/overview-modernising-the-energy-market.pdf

You may appreciate the short 12 page article outlining the proposals and wonder what has already been adopted.

The concept of nationalisation was not of course one of the areas under consideration but one cannot but feel the long-term planning for power generation in the UK should not be left to an assortment of companies with short-term shareholder considerations. Politicians have even shorter forward planning horizons – probably measured in months.

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Guest

I have been with British Gas for more years than I can remember and I will not be switching, earlier in the year all the other big companies put there’s up and British Gas froze their prices till September so we all new that it would be eventually going up. I think all energy companies are greedy.

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Guest

I wish Which? would focus on the problem that when fixed tariffs end, customers land up on more expensive standard variable tariffs. This exploits the vulnerable and also those who fail to take action, maybe because of serious illness or a whole variety of other reasons. Most of us can and should be able to avoid ending up on an expensive tariff, but let’s think about people other than ourselves.

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Guest

The market is “broken” in a number of ways, not only the price (tariff) we pay, but also the standing charges. Just moved to my utility companies new tariff and the standing charges have almost doubled. Having to pay to cover other peoples solar panels + other green subsidies , or a pointless smart meter research and rollout (just wait til you get intra day pricing, you won’t like them then). And don’t get me started on the rules for switching, how can a company be allowed to quote a £350 saving on a fictitious scenario ( moving to a variable tariff ) when using my equally fictitious scenario of staying on the same tariff would see me paying £250 more.
I see the only way to fix this market is to take one company back into public ownership, but don’t let the government run it, set a more realistic price then the others will have to follow suit.

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Guest

I support your proposal, William.

Guest
Samantha Evans says:
18 September 2017

I went to green power from Scottish Power and my payments have dropped by almost half. At my business I changed to Ecotricity and their standing charges were alot cheaper than any of the others. At home I have always been on pay as you go, so I don’t get big winter bills. I went with Robin Hood, which I believe is from Nottingham Council. Again alot cheaper last year than any others years of payment.
If people moved away from the Big rip off companies then they would have to lower their charges. Power is with the people, if only they acted upon it.

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Guest

consumers had been ripped-off to the tune of £1.4bn a year . Is this because many consumers have not changed from standard variable tariffs – for a number of reasons, and the comparison being made is what they could have saved if they’d all gone on to the cheaper fixed price fixed term tariffs? If so, it may be ignoring the fact that if everyone migrated to fixed price tariffs, their prices would rise substantially, simply because they are currently being subsidised in my view. The energy companies could not possibly see £1.4 billion of turnover – and therefore profit – wiped out. Ofgen publish the profits of the major energy companies collectively at around £7-800 million a year. So if the “£1.4 billion rip off” were true, they’d end up losing £600 million a year……..

I have suggested abolishing fixed price fixed term subsidised tariffs and using the removal of the subsidy to reduce the cost of standard variable tariffs – which all should then use.

Guest
bishbut says:
Today 06:54

Not ripped off In a way people are being scammed by the energy companies maybe just to make them stay or pay more another subtle scam ?

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Guest

Compare energy prices in the UK with those elsewhere in Europe, and factor in the Government-imposed charges that are not core to energy supply (around £100 I believe – plus vat). Which? need to explain this properly, and come up with serious proposals for how energy should be charged for. Simply beating the “rip off” drum is little more than generating populist headlines. They’d probably get the same response if they asked 2000 consumers about rent costs, house prices, food prices, commuting costs and taxes……………… Come on Which?, look at this issue in detail yourselves and perhaps come up with a “model energy supplier” and what their costs should be. Then you can elicit logical support, and not emotive responses.

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Guest

Malcolm , you do know that Germany is the hub country for Gazprom and that Russia gives big concessions to Germany even with the US induced anti-Russian rhetoric .Germany then adds its own charges to the cost . There is a pipe line(or two) going to the South East coast of England connected to the main EU network . The UK doesn’t import much Russian gas due to the USA telling it not to. It gets its supplies from much dearer alternatives . Its so nice of the USA telling us to pay much more so that their policy of bringing Russia down can take effect under Donald,s Energy “security “policy which is — BUY US very high price gas . Germany has worked out its impossible to stop importing Russian gas so has partially fallen out with Donald but is delaying North Stream 2 on his orders . While this is happening pipelines through -now Russia,s enemy the Ukraine will likely be cut off making the economic situation in the EU pretty bad as the heavy US sanctions have a very bad effect on Germany + France etc . Donald couldn’t care less how much foreigners suffer so long as the US will make $Billions .I posted a good while ago the difference in gas prices paid by countries friendly to Russia and those being told to hate it. I can supply all the countries /amounts paid / the pipelines etc etc etc . Putin has now started Turkish Stream with Eregon,s blessing and intends to branch it to Europe but heavy US pressure s being put on countries like Bulgaria to block it . So what does that leave ? –impending future disaster and the UK paying increasing high prices due in the most part to US foreign policy which is entirely economic – under America First terms, a stated US policy approved by Congress. But never mind just ignore what I said and watch as prices increase and fuel poverty UK becomes a major problem .

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Guest

According to Eurostat, for 2016, domestic gas prices in Germany were €0.044 / kWh without taxes and levies. In the UK they were €0.043. Industry € 0.033/0.026.