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A damning indictment o​f​​ ​the energy industry

Energy prices up

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?


John, the advantage to my mind of Ofgem running a PCW is it should be free of any commercial pressures, show results for all tariffs and all suppliers and be seen to be impartial. Using a PCW where you simply put in your annual consumption and address makes finding your lowest cost providers simple – no calculations to perform. PCWs should be available on the phone as well for those who cannot or do not wish to use the internet. Which? has this.

They then need to publicise widely the simplicity of change with significant savings for those who have never been able to or who have never bothered to change tariffs or supplier. I’m not sure how far you can force people to save money.


I agree Malcolm. I should have made it clearer that I support the idea of a non-commercial, supplier-neutral, Ofgem-operated PCW and have no concerns about this type of facility coming between the customer and the suppliers as it would lubricate the market not constrain it. .

I think your comments on publicising the simplicity of switching tariffs and switching suppliers. One possible barrier to switching is the need for customers to have their annual consumption figures to hand when they want to look up alternatives. There is no technical reason why this data could not already be captured by the comparison system if Ofgem ran the site, and subject to certain security ID protocols and home address details, could calculate and present the before and after monthly charges. I would have reservations of commercial companies having access to this data as there is a risk of misuse and marketing abuse. We could approach a position where there is a private sector supply side operating within a a public sector-operated [rather then merely regulated] market place securing the benefits of competition without its excesses and adverse effects.

I can’t let this pass without again calling for the government to cut back the overhang of levies, charges and ‘obligations’ that have climbed all over the trellis work of energy pricing. We will not get simplicity in pricing that enables easy switching until this is done. Understandably, but not acceptably, there is no reference to this in the correspondence between Ofgem and the CMA.


Second paragraph first sentence should say “I agree with . . .” instead of “I think . . .”.

John says:
8 August 2015

There are two factors which apply, which I do not think many others have mentioned.
Firstly, I believe many consumers have stayed with British Gas largely through inertia but also because they mistakenly think they are acting out of nationalist or patriotic sentiment. Buying British – as they see it – despite the fact that most informed people are aware that since it became privatised it is now in the ownership of foreign companies.
British Gas are fully aware of this, which is why they consistently maintain high prices, always ready to increase their energy prices whenever the spot oil price goes up but never reduce their prices when oil – as now – is at an all time low of under $50 – more the half the price historically.
Secondly, the truth is that energy still remains relatively cheap, especially for those who opt for joint supplies of gas and electricity on a paperless billing basis and monthly standing payments.
The cost of energy has steadily crept up to levels thought unimaginable a few years ago but it has been such a gradual process that it has still not fully registered in the minds of most consumers.
Inertia and unawareness on the part of consumers has been the energy companies’ best friends.


I have watched the discusions on the electricity tariffs and can see that the companies have managed for the consumers to be divided so that they can continue to be over charged.
It would be better for the all the consumers to agree on one type of tariff, even if half did not realy want that type, it might then force a change
I would suggest that the most simple is adopted, that is x pence per kWh (no standing charge) and an off peak tariff of y pence per kWh during the day and a reduced price of z pence per kWh for the night period. No other prices, discounts, charges etc. allowed. The method of payment to be cash over the counter, cheque, direct debit and pre payment, etc., all at the same tariff.
Inaddition all ‘green’ charges, obligations and restictions on coal fired power stations, subscidences on wind generation and commercial solar power to cease.The ‘renewable’ wind and solar power has been shown to in crease pollution due to the need to operate conventional plant at part low load to back up the sudden variation in wind and solar.
OFGEM to be given the power to fix the tariffs twice a year

John Kusz says:
17 August 2015

This is exactly what I would like to see in the energy market, as before privatisation every one paid the same price per unit whether it was gas or electricity, and as for the useless politicians lack of political will to tackle this problem, could it be that they are hoping to get directorships in these companies when they get kicked out of power, for looking after these companies when they had the power to do so? You do not need a degree to see the energy companies are in a cartel to screw the public for as much as they can get away with


Hit the nail on the head. It is illegal to run a cartel, but they think that working people are to dumb to realise thats just what they are doing.
And just like the Banksters they get over inflated bonusses.


Nationalise all of them and then will be the same price per unit or kw