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Why the CMA must deliver a fairer energy market

Energy prices

The price cuts from the Big Six come into effect this month. But our research shows that the energy market is still failing customers, with people missing out on savings of up to £400 a year.

Our latest analysis, ahead of the Competition and Markets Authority (CMA) announcement on its final remedies for the energy market, shows that Big Six customers will save just £30 a year when the latest price cuts come into effect.

That’s small pittance compared to the £400 they could save if they switched to the cheapest deal on the market.

We want fair energy prices

Over the last couple of months we’ve seen the Big Six providers (and some of the smaller ones too) announce price cuts to their gas prices. However, with dropping wholesale costs many will question whether these 5% cuts are enough. This includes thousands of our Fair Energy Prices campaign supporters, such as Susan:

‘Energy prices have been too high for too long. Something needs to be done now to stop us paying over the odds. We are being ripped off.’

Read more about how we calculated how much the Big Six price cuts will save customers compared to the cheapest deals on the market.

Paying over the odds

The disparity certainly seems to highlight why the energy market was referred to the CMA in the first place, with millions paying over the odds and society’s most vulnerable having to make difficult decisions about their energy usage during cold weather. Our supporter Lindsey sums this up:

‘It’s a disgrace that our most vulnerable in society have to make the choice of “eating or heating”. We are not a third world country and people shouldn’t have to live like we are.’

Although customers could save £400 a year by switching to the cheapest dual fuel deal, doing so isn’t always straightforward. And it can be out of reach for many, especially the most vulnerable. That’s why our Fair Energy Prices campaign is also calling for the process to be made easier for everyone. Paula told us:

‘Consumers need better information that is easily understood. We as consumers are at the mercy of huge companies as we do not understand global prices.’

Putting pressure on the CMA

We’re expecting the CMA to report back imminently and there’s a lot resting on its final proposals. So far over 360,000 of you have joined our calls for fair energy prices and today we’ve shared your stories with the CMA to demonstrate that the market just isn’t working.

You can read the dossier we shared with the CMA today, including a snapshot of stories from more than 30,000 comments here [PDF].

The CMA has a real chance to fix the broken energy market, to make switching easier and penalise suppliers who don’t protect the most vulnerable. It will be judged on the legacy of its recommendations and if it doesn’t deliver a fairer energy market, it will have failed.

We’re all waiting with baited breath, but we need your help to make a final push on the CMA. Tell them, why do you want fair energy prices?

[UPDATE 10 MARCH 2016] – After two years investigating, the Competition and Markets Authority has given its final verdict on the energy market. Read the CMA’s proposals and have your say in our new conversation.

Do you think the CMA will deliver fair energy prices?

No (76%, 8,736 Votes)

Don't know (18%, 2,020 Votes)

Yes (7%, 766 Votes)

Total Voters: 11,522

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Comments
Member

I belong to an online protest group,38 degrees,We have come to the attention of the Big Six and they are worried as thousands of our members, have secured a deal, moved smaller/cheaper suppliers in the last week.
It has grown very powerful, supported by people feeling they have no voice, in challenging Politicians,NHS privatisation,Tax avoidance, MP’s Expenses scandel. It/we leave no (dodgy)stone unturned.

Member

The CMA seems to be a” toothless” tiger and needs to do much more for energy users. They have had years to make the energy companies reduce their prices, but just seem to sit on their hands. Question. Is the CMA earning fees from the power companies.

Member

As you say, a ‘toothless’ entity, and while one hopes they are not taking ‘backhanders’ from the energy companies, they do appear primarily to be there only for the Government to be able to say “Oh look, you (the consumer) can’t be getting a bad deal because we have put into place the CMA to keep a check on those naughty energy companies” – and, as we all know, if the Government say it’s okay then it must surely be okay… …right?

Member

It’s really very easy to switch suppliers. If the majority of people choose not to do so, for whatever reason, what dos that tell you? I have switched suppliers for energy, insurance and broadband – it’s a simple process.
Leave people alone to make their own choices (vulnerable people aside and accepted)

Member
J. C. Coyle says:
6 March 2016

Yes, but elderly, unwaged and vulnerable people often do not have or understand computers. These are the people we need to help.

Member

Switching can be done by telephone. You don’t need a computer. I agree there are people who are unable to deal with these sorts of matters; they need help. Ideally family members should provide this or, failing that, organisations such as CAB. If, as is likely, the right sort of help is scarce then we should do something to rectify that.

Member
JasonOruairc says:
7 March 2016

It’s not easy to switch suppliers in Northern Ireland – we don’t have access to the suppliers that the rest of the UK do. Choice of 2 for gas and electricity. Hopefully other players coming into the market but at the moment we’re screwed.

Also, there may be many reasons why people stick with the Big 6 energy providers, I doubt it’s as easy for everyone as you imagine; many of us aren’t computer-literate, many people rent and don’t have the option. People might not be aware that switching is even a possibility, or be aware that it is even worthwhile doing (why would you switch if there is little observable difference between providers?).

Member
D AMckenna says:
5 March 2016

Re – Nationalise Gas & Electricity Consumers would benefit from
A standard straight forward pricing structure for one and all – The vulnerable will not be disadvantaged
A National utility with such a large order for Gas would be able to get a better cheaper Bulk purchase of Gas from the International suppliers – rather than many smaller Co’s who have little clout in the Market place
The bulk of Advertising Sales & Office staff cost’s would be elimanated further reducing cost’s to the consumer