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Do you think the Big Six are out of touch?

energy prices

Our latest analysis of energy prices demonstrates the Big Six energy providers are out of touch with the market with the price gap between their standard tariffs and the cheapest deals on the market almost doubling.

In just a few weeks the Competition and Markets Authority (CMA) will publish its final decision on how to fix the energy market. You may remember that, with your support, we’ve been campaigning for the CMA’s investigation into the energy market for over the past two years to tackle the lack of competition, the sheer number of people paying over the odds for their energy and the limited protection for vulnerable customers.

Energy prices

Well our new analysis has looked at energy prices over the last two years since the CMA started its investigation. It reveals that the gap between the average Big Six and the cheapest on the market has risen from £182 to £329.

That’s a big gap, and it’s been increasing since 2014.

Yet, despite the significant savings available the official figures for switching rates highlight that there’s only been a small increase over the last two years.

So what’s going on? The CMA recently set out its initial thoughts on the energy market and how it intends to fix it, the report highlighted that the cost to consumers of an uncompetitive market stands at around £1.7 billion, a figure that’s rising.

The CMA proposed a range of measures including a central database of ‘disengaged’ consumers open to energy suppliers to contact each other’s customers; a ‘cap’ for customers who have pre-payment meters; a programme of testing by the regulator Ofgem and; the removal of some of the rules surrounding what tariffs energy companies can provide to their customers.

In our opinion, it isn’t clear how the CMA will judge its investigation and proposals as being successful.

Our call on the CMA

That’s why today we’ve set a challenge to the CMA ahead of its final report.

We want to see how the CMA will be evaluating the success of its remedies, as well as how it will make sure vulnerable people who’ve never switched supplier and are overpaying will get better outcomes and pay a fair price.

We also want to see energy suppliers step up and begin to work harder to restore trust in the energy market.

With almost 500,000 of you who’ve joined our call for fair energy prices, there’s a weight of expectation on the shoulders of the CMA. It’s time to deliver.

So what do you think to the energy prices you pay? Have you switched your energy provider recently? How easy did you find it?

Comments
Member

Privatisation has introduced competition, but at a cost. We have a significant number of people, including the most vulnerable members of society, paying higher prices, effectively subsidising those who engage with the switching game. We have also also allowed foreign countries to have considerable control over our energy industry, which seems very unwise to me.

I recognise the benefit of competition, but there is no reason why this has to happen at the point of sale. The energy companies could compete for a share in electricity and gas supply and all consumers could pay the same price. That would be fairer than the present system.

Member
E. Gibello says:
10 June 2016

Energy should not be privatised, as Post and other necessities for life These should always be in the hand of an elected( proportional voting system still lacking in UK)Government.

Member
colin brockwell says:
11 June 2016

I agree 100% gibello

Member

If the government were to put away a few billion pounds each year into a re-purchase fund we could probably achieve this in around twenty-five years [with compound interest]. Of course, we would have to forego what that money buys in the meantime.

Member

Hang on a minute – didn’t an elected( proportional voting system then lacking in UK)Government – decide to privatise these industries?

Why should we trust a Government that doesn’t want to own and run these industries to run them efficiently and fairly?

Member
Frank Greaves-Shaw says:
11 June 2016

I don’t get your point at all on having to put awaay billions of pounds to buy back these services.
They got them for a drop down cost and have reaped billions from them since. So it would be quite logical and even legal, to take them back into public ownership at no cost to us..

Member

Yes, Frank, a future government could pass legislation to compulsorily re-acquire all the shares in the companies that provide utility and other essential services [plus a few more that were still in their infancy in the 1980’s like mobile telecommunications or, indeed, barely embryonic like satellite broadcasting]. Having been bought from the original buyers of the privatised companies these shares are largely held now by institutional investors [like pension funds and managed personal investment portfolios] and by foreign companies or governments. Many, and possibly most, of the utility companies are themselves foreign-owned so it would not be straightforward but arguably it is one way of getting on in the world if nothing else matters.

I seem to recall that the money received by the government for the whole privatisation programme was around £30 billion at historic prices – not exactly a “drop down cost” – and some companies have appreciated in value enormously since privatisation so their current market value is very high; but some of the industries that were privatised have little relevance to domestic consumers [so would presumably be outside a buy-back programme] or no longer exist in recognisable form.

I wrote at the beginning “a future government” because such a measure would require a totalitarian regime to sustain it and we do not enjoy such liberty in our present situation.

Member

Further to Frack GS’s post, from my very limited experience of EUlaw in action, I am sure that, without proportionate compensation payments to the current owners, re-nationalisation would be illegal.

Member
Maxximus says:
12 June 2016

The British had the best society due to Socialism, but they became lazy, selfish, greedy and jealous of the ‘haves’. They wanted to become like Americans, so the politicians gave the family silver away to their friends and backers, now we have no remaining British industry because they belong to foreigners.
Blame the ignorant, uneducated, greedy peasants for our predicament, not these companies whose only purpose is to exploit and make profits.

Member

Even if the UK left the EU it would be illegal under UK law so Parliament would have to pass new legislation. That certainly isn’t going to happen under the present government, or even the next one in all likelihood. But irrespective of the legal issues, which lawyers could no doubt ruminate on exhaustively, there is the matter of the effect on the economy and future trading relationships of a country that would dispossess owners of their valuable assets and income streams. As well as other financial services sectors, the life assurance and private pensions industry would be so seriously disrupted that there would be major repercussions against the state and the whole compulsory expropriation exercise would become counter-productive. However desirable re-nationalisation might or might not be, it is not going to solve the present problems in the energy market.

Member

I thought the ‘family silver’ [the gas, electricity, water, telecoms, railways, petrochemicals, engineering, steel, aerospace, and numerous other industries] was largely sold – not “given away” – to private investors who could buy limited numbers of shares each in the initial public offerings. The prices were attractive and quickly appreciated so ultimately the shares were sold on to corporate investors. Personally I put the faults of the utility companies down to slack regulation. The actual profits don’t seem to be particularly impressive as a percentage of turnover but because the ‘big six’ energy companies have complex operating structures that include production it is difficult to unravel the economics for the domestic market. Government obligations, levies and taxes further distort the consumer prices.

Member

The intro says:
“to tackle the lack of competition”
“the cost to consumers of an uncompetitive market stands at around £1.7 billion,”
then
“the gap between the average Big Six and the cheapest on the market has risen from £182 to £329.”

Well, I would have thought the latter statement demonstrates very clearly that there is competition. Otherwise all prices would be the same, wouldn’t they? What is needed is people taking advantage of this competition. CMA points out that many know they can, know how to, but don’t bother.

Certainly the vulnerable need helping, and should be helped separately.

Be careful, though, how we view these deals. If everyone went for the cheapest deals – generally fixed-price ones – then profits would dip as the extra revenue from “standard” (variable price) tariffs would fall substantially. So these “cheaper” deals would then rise in cost to restore profits . I’d like to see choice in tariffs, clearly advertised, and a central independent (that is, of commmercial motives) comparison site. Simply put in your annual usage, post code, and find the cheapest deals from which you can select the one you want. I’d like someone like Ofgem to offer this. Then no more “selective” comparison sites, no more “commissions” for customers who switch through them.

There are around 40 odd energy companies, larger and small, vying for our business. Some will have lower overheads than others, some will buy better on the forward market, some will produce cheaper energy from their own resources. Transmission costs will be higher to some areas than others. Some pay government levies, the smaller ones get some relief. So have them all forced to charge exactly the same would mean the more efficient suppliers would get a nice profits bonus. I doubt that would go down very well with consumers.

We have choice. Lets keep it and let those who choose to shop around, as for any other purchase, make use of that choice. Just make it easier to switch (already in hand) and give special help to those unable to help themselves. pricing.

Member

“Certainly the vulnerable need helping, and should be helped separately.” So we might help the vulnerable (no certainty about this) so that the companies can go on exploiting them and making profits for the shareholders. That does not seem like a good idea.

Member

I don’t follow your comment. We help the vulnerable to choose an appropriate tariff. Ofgem are making proposals for the vulnerable to be helped by the energy companies. Then somehow they are being “exploited”? and the shareholders will profit? Charging the same price, whichever energy company it is, is a very certain way of some companies’ profits artificially increasing out of proportion and their shareholders profiting. That would probably increase investment in them at the expense of smaller companies and then…………………….

Member

I did not write the introduction, Malcolm. The price difference between tariffs is becoming greater and no amount of tinkering will solve the problem of vulnerable being charged more. It’s fine to suggest that benefits are available for the vulnerable but it is well known that those who are eligible to benefits don’t always claim them.

We need a radical solution to put an end to the most vulnerable members of the community being exploited by the energy companies.

Member

I did not suggest you did write the introduction, I am not suggesting either that it is done through benefits. I am suggesting that the vulnerable receive help to get onto energy deals that are appropriate to their needs. This is not very different from them being helped to deal with other aspects of life. Charities, family, and others concerned with these people can help in practical ways. There are, i believe, Ofgem proposals aimed at getting energy companies involved. One such concerns pre-pay meters, to remove the problems these can create unecessarily.

Member

It would be simpler not to exploit the vulnerable in the first place.

Member

No one is being “exploited”. Most people (excluding, for example, those in debt to their supplier) have the freedom to choose from all the suppliers a tariff that best suits their needs. On the internet, by phone. What is a barrier to some is their inability to use these methods, or know how to deal with them. Therefore they need help to do this. That is not “exploitation”, no more than people who cannot use the internet to buy cheaper goods, or whose local supermarket is more expensive than another they cannot access, are being exploited.

Member
Jan says:
10 June 2016

Malcolm makes a very good comment:

“Be careful, though, how we view these deals. If everyone went for the cheapest deals – generally fixed-price ones – then profits would dip as the extra revenue from “standard” (variable price) tariffs would fall substantially. So these “cheaper” deals would then rise in cost to restore profits . I’d like to see choice in tariffs, clearly advertised, and a central independent (that is, of commmercial motives) comparison site. Simply put in your annual usage, post code, and find the cheapest deals from which you can select the one you want. I’d like someone like Ofgem to offer this. Then no more “selective” comparison sites, no more “commissions” for customers who switch through them.

Ofgem take note please

Malcolm, You make a very good suggestion here. I would suggest you put your idea on the 38 Degrees forum it is easy to do, that way if enough people add their name this might force Ofgem to consider your very valid idea.

Member
Greycynic says:
11 June 2016

I think that you have missed the point here. The quote you give compares the average price of Big Six with that of the cheapest. This tells us that the prices the Big Six charge are actually all very similar. I suggest that this is typical of dis-functional, open markets. I believe it is fallacious to assume that having an open market will automatically lead to low prices. When you look around real marketplaces you soon realise that the main suppliers group their prices at values representing the highest price that the bulk of purchasers will pay for the lowest quality product/service those same purchasers will accept. This is why I do not believe that the CMA will actually change anything.

Member

The intro says ” the price gap between their standard tariffs and the cheapest deals on the market almost doubling.”. Standard (variable) tariffs are the most expensive from any supplier so it is not fair to compare them with fixed price tariffs. You need to compare like with like. The “big 6” offer fixed price cheaper tariffs.

Main suppliers = highest prices? I’ve just looked at pricing my annual consumption. The best (cheapest) currently is Sainsbury – which effectively is British Gas as a reseller. Scottish Power came 5th out of 178 offers. Other “big 6” figure on the list with plenty of smaller companies among and below them.

If we know who the cheaper companies are, then why not use them?

Member
Jonty says:
11 June 2016

You are right I am fighting 6 incurable disease and live alone been with British Gas for over 40 years i used to have an essential user tariff then they took that away and put me on a standard tariff i have a prepayment meter and never been offered a cheaper tariff. Why do i pay more when they do not have to pay someone to read the meter, accounts are computerised no staff with pencils and adding machines. Between december 2014 and January 20 15 over 6 weeks i put £170 in but they say the meter is ok

Member
seasmith90 says:
12 June 2016

THESE people Malcolm r?! They are the same as you and me but with less money and should not have to rely on charity to be able to afford energy, especially when others are making big profits from the essentials for civilised living. Energy ( and water) should be taken back into public ownership and everyone should be on one tariff: the cheapest. Instead of tinkering with different tariffs the effort would be better used to develop new ways of generating cheap energy. In the not too distant future we could become our own generators, the technology is already there for instance to harness the friction from our shoes as we walk and turn it into electricity, and just needs to be developed.

Member
seasmith90 says:
12 June 2016

Jan people do not want lots of different tariffs, they just want one: the cheapest. All the profits given to shareholders and enormous salaries paid to CEO’s could be used to reduce the cost of energy and fund new technology if the energy firms were ditched and it was taken back into state control.
As for 38 Degrees don’t go there! They claim the credit for other peoples’ campaigns and just want your money, and earn well from lobbying people in and around Parliament.

Member

Up until my last switch ( its still in progress) ( FYI switching still takes too long, last switch last year took 8 weeks) I’ve always ended up paying more. This time I’m switching to a council run municipal energy company, the main difference being the standing charges are almost half what I have been paying. And yes the standing charge makes up a big portion of the bill.

I personally I’m not a huge fan of switching. That isn’t helped by the rules energy companies can use in showing savings. I don’t see that being address by the CMA. No idea what I mean? Well if your fixed tariff ends within the next year then the energy companies are allowed to assume you’ll switch to the default ripoff tariff which will then totally skew any figures. Last year I was quoted a saving of £129 for the year, yet the new tariff had higher standing charges for gas and leccy. The new tariff had higher unit prices for both gas and leccy , so please how is this saving me money. Until this ludicrous rule is stopped there’s little reason for energy companies to pass on bigger savings. When is a saving not a saving, when its one quoted by an energy supplier. All hail RipOff Britain and weak regulators.

Member

william, even the Which? Switch site uses this calculation when you are part way through a fixed-price tariff. Using the standard variable tariff as a basis is used since they have no idea what other tariff to use; and if you do nothing and your fixed price deal expires you will be automatically transferred onto the SVT until you choose otherwise.

I find the best way, when I use Which? Switch is to put in my annual kWh usage and simply look at the total cost of the best deals. That is all I really want to know for the next usage period.

It does take time to switch, partly because your meter numbers have to be confirmed centrally and you will still be given a cooling off period. However, unless you are on a poor tariff the savings “lost” during the changeover should not be huge.

Member

Then maybe the price comparison should only show up to the date your fixed tariff ends, thereby giving an accurate comparison. Problem solved. Rather than allow these profiteering companies to hide the fact that they’re not actually offering you a true saving.
And just because Which use the rules doesn’t mean the rules are right and shouldn’t be corrected. And the Martin Lewis MSE switch comparison doesn’t use these rules for the exact reason I stated, they don’t believe the rule is right either and they have told ofcom, so ofcom are aware.

Member

william, I’m neither supporting nor condemning the way the calculation is done, just providing an explanation. I do not see that a published saving is more important than the predicted annual cost of alternative tariffs. I can select the most appropriate for my needs on that basis alone.

Member
Derek says:
10 June 2016

The big 6 still steal contracts then refuse to accept that you did not ask for a more expensive supplier. The process of switching and making real comparisons is over complex and fraught with circling sharks. The “competition” is usually between the expensive and the criminally expensive. Try doing it on prepay or as a small business and don’t dare tell them you could not possibly have used two years electric in 2 months.

Member

The Big 6 are not the only ones who do so. Spark Energy is collaborating with letting agents to force tenants to use them. The letting agents switch properties to Spark between tenancies (without the knowledge of the landlord) so that they can tell the next tenant that the property is “already with” Spark and put a clause in their tenancy agreement saying that they are not allowed to move it away from Spark. Obviously Spark is paying the letting agents a kickback to get them to do this.

Member
Keith Neville says:
10 June 2016

Since I am disabled, I require assistance from my energy company for meter reading etc. Much of this assistance used to be provided automatically, but now I know that if I change my supplier it will be months before the message will get through. In the meantime I have to deal with a second rate service from a Company that expects me to do the customer service part of its responsibilities to me.

Member

Ask, perhaps, for a smart meter which will do this automatically.

Member

I don’t support the vast cost of the smart meter roll out, but perhaps there is a good case to give these to those who have problems with reading their meters or get into financial problems with their energy bills. One problem with smart meters is that they may lose functionality if you switch supplier, or so I have read.

Member

I believe they all retain basic functionality. There is a standard to ensure the compatibility of all makes of smart meter.

Like you I think they are, on the whole, a waste of money. If we can’t be bothered to change supplier we are hardly going to be bothered to watch a smart meter and alter our energy consumption habits – even if there was significant scope for change which I would doubt. The money (well, our money) would have been much better spent in my view in upgrading the insulation of properties where the residents could not afford to do it for themselves, and giving cheap loans to others to do the same. Not only would that reduce their energy bills but it would also reduce the maximum demand. Perhaps there are not enough such properties left that would benefit, though?

Member

I very much doubt if the majority of people could work out their gas or electricity consumption easily but if their smart meter showed that they were using 10p electricity and 20p gas per hour or their total consumption of both for the week was £20 so far, they might be able to relate to it.

I have always felt that smart meters should be available to those who want to buy one, but perhaps there is a case for giving one to those in arrears with their fuel bills. I know that those with solar panels tend to become aware of their consumption, for example by putting on the washing machine when the sun comes out, so it seems possible that some users will use theirs to help cut their consumption.

Member

wavechange – at least for electricity, most of the benefits you mention are readily available to anyone you can get an electricity monitor, e.g. an Owl or similar:

“The Owl Electricity Monitor
OWL wireless electricity monitor shows you how much electricity you are using, how much it is costing you and how much carbon is being generated.
This means you can see in real time the benefits of turning off electrical devices .”

Obviously, equivalent, simple, clip on devices are not available for gas.

But whilst you can save money by turning off devices, most core costs will arise from basic needs like lighting, heating, cooking, washing and drying clothes and so on.

Member

I agree, Derek. A lot cheaper than smart meters.

Member
Bob P says:
10 June 2016

Whats the point of spending precious time wading through all of the company promises to give cheaper deals when you find that by the time the new deal starts there is another company giving a better deal . Since the government has given these company the sell off to overseas owners this has made matters worse . We should have kept things as they where years ago when we owned them . We have given them all away & things will only get worse over the years owing to these big companies holding us all to ransom . We have our electricity via a pre payment meter not because we cannot pay but because it turns out cheaper than paying by billing & we know what is being used which could have saved us all money instead of us all paying in the long run to have smart meters . This is as good as what it will be when these new smart meters are every ones way of getting power & after us all paying for them they will still be trying to give us said better deals but still it will be costing us more every year while they save millions by knowing our very moves on a daily bases . The Companies know the minute we pay on the top up key each time , know how much we are using , we only get a meter read once a year . This saves meter readers calling every quarter thus saves them money , & they have our money up front before supplying us the product instead of by billing after we get the product . But we have never had anyone fighting out case for purchasing the product on a cheaper tariff , is that fair ? I think not so it shows how those who uses this system simply to be able to pay & live on a small budget no real help at all . We stay on this system because we are elderly & cannot be fussed with all this ( our tariff is cheaper than ***** , When we cannot pay then we have gone to many years in this greedy world , We the payers to these large companies will always be held to ransom to pay there top fat cats stupid salaries & golden handshakes when leaving by showing there thanks for helping to get one over there customers .

Member
Dennis Houghton says:
10 June 2016

There is apathy out there and the energy companies will continue to gain from it , as to being “out of touch”, I definately they are not , they have had long enough now to know that there are issues , everyone of them , have forums , mostly with negative comments .One of the energy companies needs to really feel “the heat” by experienceing a mass leave , then that would shake them up .I am on my third switch and I can write that none of them have tried to keep me , even the one I had been with 10 years or more, banging you on to a standard tarriff is still the only answer they have to offer, having become a “switcher” and saved money I intend to keep on switching.
Smart meters ? got one within 6 months with last Supplier (e.on) no chance even 10 years with npower, now I have switched only parts of the smart meter works which means I have to send in readings once a month.
Smart? not that smart then?
I could go on

Member
Patricia Kindelan says:
10 June 2016

I have switched twice in the past year, most recently 2 weeks ago. Last night I got a phone call from SSE (who I was moving from), and they cut the unit price to 12, whereas before it was almost 14. Budget who almost got me quoted 13.43, so at least they’re being more competitive. This has never happened before, I have only switched via doorstep callers.

Member

When I switched earlier this year, I switched to the cheapest deal available for me. It was from npower – one of the big six – but other smaller suppliers were offering very similar prices.

I guess that many retailers make little or no profit on their cheapest deals. This is all part of the way the market works. The retailers’ objectives are to get market share and volume from those deals. Any profits they’ll be making will be coming from their standard tariffs, from the customers who are unwilling or unable to shop around and change tariffs.

Member

Just so, Derek. I think we should abandon fixed price deals and use a standard variable tariff, with variants to suit different people. Off peak tariffs, two tier tariffs for lower users. Smart meters will open up the possibility for 1/2 hour charging (time of day tariffs reflecting the variable cost of electricity based on demand). Do we want that? It might save many some money, but estimating the best supplier and your likely bill could be more complicated.

Member
bored with excuses says:
10 June 2016

The “competitive” market is largely mythical as the providers all collaborate, if only informally (look at the graphs), as it is in their interest to artificially inflate prices. Regulators are neutered beings that do little but avoid the very worst case stuff leaving the average consumer screwed.

Member
Dave Owen says:
10 June 2016

Explain how our, bought and paid for, dual passport politicians, get away with this stupidity.
There is no competition, or the price of electricity would follow the price of oil and gas.
The wholesale price of oil and gas has plummeted to less than half what it was a few years ago.
Electricity prices went down 5%.
The majority of our politicians have another master, it’s not the voters.

Member

Dave your right “dual passport holders ” run this country and the US . But can the public accept the truth ? Nope !

Member

“Explain how our, bought and paid for, dual passport politicians, get away with this stupidity.”

Easily done – we voted them in 🙁

(Most especially when they privatized all our loss making state industries.)

Member
BDW says:
10 June 2016

I switched 2 months ago from British Gas to Scottish Power.. My monthly direct debit has halved from £84 to £45 so I’m going to help my elderly neighbours to switch too!

Member
Judith Poole says:
11 June 2016

Two days ago I received an email from EDF informing me that my monthly direct debit for dual fuel had gone from £65 to £105. I spent an hour and a half on the phone yesterday afternoon sorting this out. First of all it was my fault that I hadn’t changed my tariff as from 1st April when the old one ran out. Wrong, I had acted on their email informing me that my current tariff was coming to an end back in February as soon as it fell into my in box. Apparently there had been a computer glitch and only my gas tariff had been switched.
How do elderly or people without access to a computer cope in situations such as this? Answer – pay the higher tariff!

Member

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Member
phlip says:
11 June 2016

spare a thought for the army of people who have to buy unspecified electricity card credit from their landlord/agent as per rule of tenancy, without ever letting them know what tarriff they are on. its rife in my home town of blackpool and is another way of exploitation too. also i have to use the prepay gas meter with its criminally inflated pricing system. thankfully my circumstances are changing soon and all this forced nonsense is going to stop, that only compunds peoples misery and lack of choice and freedom.

Member
Eileen Peakman says:
11 June 2016

I switched to Ovo a few years ago and find them much nicer to deal with that the big 6 They also pay 3% interest on any credit balances and they have green energy alternatives.

Member
RDWN says:
11 June 2016

I am with you Eileen, OVO are brilliant, readings given every month, easy log in a monthly usage graph, massive savings. I wish to warn against Co-op Energy who I switched to via the Which Big Switch, I foolishly trusted the Co-op, it cost me 100s of £s and they are a nightmare to deal with.

Member

Certain Convo topics see constructive comments that some disagree with being attacked on the basis the “vulnerable are not being considered”. Sometimes these kind of comments suggest the contributor does not have a social conscience whereas the commenter does.

I am happy to declare my interest. I believe people who have the ability and the capability should stand on their own feet, think for themselves, be taught appropriately and not rely on the State to do their thinking for them. The State should be asked to ensure that public and private enterprises, charities and so on behave in an honest, legal and transparent way so the vast majority of people can make rational decisions based on choice.

I also help vulnerable people at a personal level deal with matters that they are unable to do on their own. I suggest that nationally appropriate organisations are stimulated to recruit suitable people to act as “friends” to the vulnerable, to help them deal with such matters and to keep them in contact with the world around them. I has upset to hear on our local news that a local man had died in his (council) flat several months before his body was discovered.

I suggest that Which? might run a Convo on how vulnerable people can be helped by the community around them with the aim of attractive positive and constructive proposals that might be taken further.

Member

Oh dear Malcolm, if only it were that simple!, let’s examine the facts.

There is a vast difference between competition and exploitation. Competition favours the smarter, more savvy and fortunate amongst us and can encourage a selective but narcissistic approach, by that I mean an “us and them” mentality with little regard to the reality that “them” are, at a collective level, one of us and not necessarily an inferior species.

As has already been posted, energy is a commodity as essential as food and water and should not be thrown open to the corporate market which, by its very nature is bound to lead to exploitation of the less able and vulnerable in society. Competition has been described as “The activity or condition of striving to gain or win something by defeating or establishing superiority over others”. This maybe OK in sport but not in the context of causing distress to the less able or less smart.

Exploitation on the other hand, is the act of cashing in on, making use of and benefiting from resources, capitalising on and milking other people to meet ones own self-centred needs. We have all witnessed this through the Big 6’s recent devious tacit collusion tactics, specifically designed to regulate energy prices to meet their own ends, by controlling price increases until they were well out of reach of the average consumer.

It is well known in psychological circles that of the 1% of sociopaths in the UK, 4/5% of them have been cited for more senior positions in business. This may seem a small percentage, but sociopaths are capable of causing enormous damage in senior management roles with CEO’s topping the list, some of them now actually working as government advisers, hopefully not with the CMA! Some have even been blamed for the 2007/08 recession which almost brought the world financial economy to its knees.

Rachael Orr, Oxfams head of poverty in the UK speaks of a “A tale of two Britains”. The top 1% own asmuchas the poorest 55% of the U.K. population put together and the top 10% laying claim to 44% of household wealth, while the poorest have only 9%, according to the Office of National Statistics (ONS). As the recent recession deepened, there was a rush to save among richer households which boosted the nations wealth, ensuring Britains long established financial inequality remained in place.

So what can we expect from the CMA next month? Much depends on the outcome of the EU referendum on 23rd June, but I am not raising my hopes too much. With capitalism still very much in charge in this country I would expect Rachael’s “Tale of two Britains” may become more of a narrative in the future if the regulators don’t do something to resolve the polarity that exists in current energy market prices.

Member

Exploitation:
– the action or fact of treating someone unfairly in order to benefit from their work
-The action of making use of and benefiting from resources
– The fact of making use of a situation to gain unfair advantage for oneself
In this case for the vast majority of people we have around 40 energy suppliers with no barriers to prevent consumers from choosing an appropriate deal. That is competition not exploitation as I see it.

However, being pedantic over the words is not the point. I want to see positive moves made to help vulnerable people get the same benefits as those who are able and capable can get (should they choose). I’d much rather work constructively towards a solution that makes this happen rather than complain about something. So if we could examine positive methods to help these people we might achieve something helpful. Whether we do this in an organised way or not we can, of course, still play our part as individuals.

As I said earlier, these same people will also benefit from help accessing better prices for food (a significantly greater spend for many than energy), getting benefit entitlements, dealing with finances, etc. etc. A caring but proactive society is what we need to develop. Society is us.

Member

All the past evidence shows there has not been too much “care” demonstrated from any of the Big 6. Any “free care” comes mostly from money donated by charitable organisations. Benefits are means tested and subject to governmental scrutiny which does little to boost anyones self worth. Society, as you rightly say Malcome is ‘us” but not “us and them”.

Choices are available to everyone, and younger computer savvy people are better able to gain and benefit from them. Spare a thought for some older people who still find computers and constant switching between the 40 odd energy companies you mention extremely daunting and confusing and would rather put their cash into a meter than risk losing it to an online fraudster. Definitely not a case of “the more the merrier” but “the more the bewilderment.”

These are just a few of the issues the CMA need to address, but it is obvious from the above report that exploitation is still rife within the energy market whose main motto seems to be “lets hang on to decreases in wholesale prices, let’s all keep charges the same and continue to expect the vulnerable to pay more,” the very people who can least afford it. That’s exploitation Malcolm and capitalism at its most abhorrent.

Member

Thanks Beryl. Then it’s time as a country we encouraged people to help those less well off than themselves. Do something to help instead of moaning about businesses.

“Spare a thought for….” As I said above I don’t like this insinuation that because someone has contrary views to others and, in particular, tries constructive suggestions, they must somehow be heartless with no social conscience. It is not a universal truth and can put genuine people off contributing to Convos in case they incur such criticism. In fact many older people are extremely computer literate and can look after their affairs very well indeed.

The report as far as I have seen says nothing about exploitation being rife.
🙂

Member
dieseltaylor says:
12 June 2016

I respect both your positions, and expositions of the same.

I am with you both that more needs to be done to protect the bewildered and the bamboozled.
I am also very conscious from my experiences that the adge of you can take horses to water but you cannot make them drink does apply.

This is a hugley complicated subject but the nub is how far are we prepared to constrain peoples free choice. If there is a half way house where we introduce a degree of coercion there will still be people who fall outside “protection” from bad decisions.

For instance we could make a special tariff for retired folk which must be loaded by default, and perhaps this applies to people with a disability allowance etc. This comes with its own set of problems but not major ones and overall could have blessings regarding disconnections or paying direct or picking up anomalies. And of course allowing people to opt out provided they give reasons or the restricted amount of Kwh available under the tariff.

Bottom line is that many disadvantaged people are poor at making good life decisions.

My immediate approach would be to trawl through all societies looking at what good ideas [and costings] can be nicked form other countries. France for a starter with it’s capped gas prices.

Member

Someone must be listening!

BBC News Report
13th June 2016

“Urgent action is needed to deal with the UK’s digital skills crisis warn MP’s, or it risks damaging the country’s productivity and competitiveness.
It is thought 12.6 million adults lack basic digital skills, while 5.8. million
have never used the internet at all. “Stubborn digital exclusion and systematic problems” with education and training need to be urgently addressed, the report said.
It urged the government’s digital strategy to be published without delay”.

Member

Malcolm, the definition of a good debate is a method of formally presenting an argument in a disciplined manner with a number of people who have contrary views.

My views have been expressed in an honest and constructive way and it was never my intention to offend in any way except to point to whoever reads my post to spare a thought for the many elderly among us who still find computers and choices of 40 energy companies rather baffling. It was not specifally addressed to yourself. For example, my 87 year old sister is a highly intelligent, computer literate individual with all her faculties intact, but it has taken me many months of persuasion to get her to switch energy companies. I am pleased to say she has finally done so but only with the help of her son. Many elderly people are resistant to change, due I would guess to familiarity with old routine, which can completely throw us off balance for quite some time.

If the above report states an average gap difference of £147 since 2014 then this anomaly needs investigating by the CMA. This would indicate either people’s reluctance to switch who are still paying over the odds for their energy and limited protection for vulnerable customers.

I don’t consider I have contravened the T&C’s or put anyone off contributing to Covos, in my last comment. I respect your often very contrary views and accept they are frequently different to mine but, In my opinion, that only adds to the appeal of a good debate.

Member

Thank you Beryl! 🙂
I would still like a Convo devoted to how we can best help the vulnerable – not just in energy but other aspects of their life where they would benefit from more able people’s help and advice.

Member
Guy Peterson says:
12 June 2016

No, they are totally in touch with a government that is prepared to clobber the poorest and make the rich richer. Why not charge the poorest people more to use a meter? Why not charge them more for buying small quantities, why not charge them more for almost everything compared to rich people? Because it is immoral. Cameron’s government is amoral and immoral. A public school Tory through and through. Will the EU referendum be his only legacy before he’s forgotten? Probably, then he will join the ranks of nondescript Prime Ministers.

Member
bishbut says:
12 June 2016

I have a smart meter I wish to find a cheaper tariff but any other suppliers say they will not be able to use it until 2020

Member
dieseltaylor says:
12 June 2016

This was dealt with on Radio 4 last week. i heard a repeat on Saturday and apparently there will be a body set up later this year which will pass the billing information between the respective companies. So if were with OVO with a smart meter then they would be required to send the reading information to whatever supplier yuo subsequently went to.

Member
John myers says:
12 June 2016

This is not knew is it the government don’t mind every1 being stung 4 thier utility bills it’s the same with the fuel stations they think people fall asleep and don’t notice how much they stick on the price it’s not known as rip-off Britain 4 nowt to would be a good thing if some1 decided 2 ask why we are forced 2 pay standing charges that are reaching astronomical proportions if you aren’t a shareholder it’s tuff tit get on with it;we just keep on getting stuffed.

Member
mr majer says:
12 June 2016

Just look what is happening now, petrol & diesel price going up every day & the government adding tax on it, & that tax stays on even when oil price going down. They think we will not notice

Member
Christine says:
13 June 2016

I heard on the news that Npower had been fined millions for the exact trick they got hundreds out of me . I have waited to hear from them. They blocked my transfer to a company with a better tariff but as I had already paid £500 off of the debt I never really owed them, I refused to pay the remaining £200. They still have not contacted me about the original breach of rules they were fined for. Now they have refered me on to a debt collection company just as I am about to apply for a mortgage.

Member
Louise says:
16 June 2016

Christine I would advise you to put a complaint in with the assistance of an organisation for example Citizens Advice Bureau and if you get nowhere go to the energy ombudsman.

Member
Douglas King says:
13 June 2016

I just changed from First Utility (63% satisfaction) to EDF energy (one of the big 6, 55% satisfaction). I got through very quickly to their advice desk and am now saving £50/month. Pretty good from where I am standing (compared prices on the Which comparison site & EDF enegy where the cheapest for me).

Member

In an item today [14/06/2016] on the BBC News website “UK inflation rate stays at 0.3%” it said “Among the reasons for low inflation are low economic and wage growth, and weak energy prices, which are still below half the levels of two years ago“. Is that really the case? If so people do not recognise or appreciate it.

Member

I am very tempted to add the word ‘wholesale’ in there somewhere John.

Member

That was my first thought, Beryl, but the article was about the Consumer Prices Index so I thought it must relate to the price of energy per unit as paid by the householder. I went into the Office for National Statistics website to see if I could find the origin of this reference but there was no mention of energy prices. There were various other upward and downward factors stated in the ONS release that contributed to the inflation rate but energy was not one of them. So I am perplexed, and wonder where the BBC got their information from. Indeed, energy does not appear as one of the items in the CPI basket of goods and services shown in a graph on the ONS website. I admit to being a bit out of my depth in looking at this data but I am convinced the phrase “weak energy prices, which are still below half the levels of two years ago” would have been part of the ONS commentary if it was indeed a significant factor. Curious, to say the least.

Member

Further to my preceding post I have submitted a question to the BBC News website seeking clarification and a source reference for the information given.

Member

John, CPI Domestic fuel components are published on the gov.uk website.
The indices go back to 1996 (as far as I can see) and I’ve abstracted these:
Electricity Gas
1996 62.5 43.3
2007 87.3 84.0
2010 100.1 104.6
2012 115.1 123.6
2014 129.1 138.8
2016 127.9 129

Member

Thanks very much Malcolm. I could not see “energy” listed in a table on the ONS website which seemed to show the ups and downs of inflation on the goods and services in the basket.

Member

I do not understand the obsession in these discussions with the “Big 6”. They are only “big” because we, the customers, choose to patronise them. Stop using them and they will not be so “big”.

I have just spent 3 minutes on Which? Switch checking how much a “medium user (12500 kWh/year gas, 3100 kWh/year electricity might pay in my area. This returned 178 estimated annual charges – from presumably all energy companies in my area. The most expensive were, as you would expect, standard variable tariffs, followed by 3 year fixed price, then 2 year and then the cheapest were 12 month fixed price tariffs.

You don’t, of course, look at 178 offerings if you want to know if change is worthwhile. If, for example, you want to pay as little as possible, just look at the first few – and they appear in order of cheapest first. Out of the first 16 offers, most were smaller companies but 3 “Big 6” featured – Scottish Power, npower and effectively British Gas (Sainsburys). Coop also figured. The cost difference from cheapest to most expensive was 10%.

So, the point I am thinking is, are we just choosing to knock the Big 6 because we like to moan at “big business” or are we really interested in getting the cheapest deals? Because all these cheap deals are available to everyone, and most people can find them and switch to them quite easily – if they want to make that little bit of effort. And Which? will give you these comparisons on line, or if you are not computer savvy, over the phone. and you can switch on line through Which? for many offers, or go direct to the company on line or by phone.

By all means lets try to drive energy prices down but, at the same time, encourage people and facilitate the process to switch to the cheaper deals. It seems to me having a good moan is one thing, taking direct action to improve your energy cost is a more constructive way of improving your own finances.

The vulnerable who can’t do any of this? We need to discuss ways to help such people, not only in energy but in other of life’s essential activities.

Member

Just switched my dad’s gas and leccy. They claim he saves £530, yet on payments to be made, actual saving is around £168. OFCOM rules are a joke to allow this.

Member
D. Bloor says:
16 June 2016

I have been an SSE customer for years, I have just changed tariffs with SSE as they say that the latest tariff will save me in excess of £400 a year. Now signed up to a 1 year Fixed Rate Tariff only so will be watching to see. As an 80 year old Widower Pensioner, mainly housebound with arthritis, heart problems and asthma I am a high user as I need to keep warm so I am finding all the high costs of my dual fuel increasingly difficult due to my poor health. I feel it will be coming to ‘do I keep warm or eat’.

Member

Sound information and advice is given here for those who want to reduce their energy bills.
http://www.which.co.uk/news/2016/06/revealed-the-cheapest-energy-deals-for-june-2016-445600/

Member
R Matta says:
22 June 2016

Regulations should be enacted that make price comparison easy by compelling energy companies to publish prices in the same format eg price per therm/kWh only, no standing charges or other addons. Simples.

Member

But it isn’t that simple, R Matta. Suppliers have the right to offer several tariffs with different features, to set different levels of standing charge or absorb the full costs in the unit rate, to give different discounts [or none at all] for paperless billing, dual fuel, direct debit, and so on. And they can use fixed rates or variable rates, and apply exit penalties or let you change supplier for nothing. It all makes for a complex and confusing bundle of variables to compare, but, through filtering, some comparison websites do make it as straightforward as possible to select the most appropriate tariff to meet your circumstances.