Millions of us are paying more for energy than we need to – that’s what a long-awaited investigation into the industry has found. So where do we go from here?
This morning the Competition and Markets Authority (CMA) has published the provisional findings of its year-long inquiry into the energy market – and possible solutions to the problems.
It’s a damning indictment of how the market is failing customers – with British households overpaying by around £1.2 billion a year and most consumers not switching to get the best deals. One in three had never even thought about switching.
What the CMA’s energy report says
The CMA found that the biggest suppliers have taken advantage of millions of households – who have at the same time been hit with the costs of government energy policy.
And the CMA found that tariffs offered by the big six energy suppliers – who have around 90% of the market between them – were around 5% higher than they should be between 2009 and 2013.
So what does that mean? For the average household it means they now spend about £1,200 each year just on energy. And for the poorest 10% of households, energy bills now account for about 10% of all their spending.
How can the problems be solved?
Among the solutions the CMA has suggested is a transitional regulated tariff while reforms are made to the energy market.
Our executive director Richard Lloyd said:
‘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. We also expect the big suppliers to quickly put in place changes that will bring more transparency and competition in the wholesale energy market.’
We’ve been highlighting the failures of the energy market for many years and welcomed the decision of the regulator, Ofgem, to refer it to the CMA last year.
More than 200,000 people have backed our Fair Energy Prices campaign, calling for simpler and fairer energy pricing.
What do you think of the CMA’s findings? Have you switched provider? If not, are you happy with your current provider or has something stopped you switching?