Responding to Ofgem’s final Retail Market Reform proposals published today, Trisha McAuley, Deputy Director at Consumer Focus Scotland, said:
‘This is a positive package of measures which should help to make the energy market clearer and simpler for people in Scotland. Particularly welcome are proposals which could cut the number of available tariffs by half. Ofgem needed to act to make the energy maze less impenetrable and these are important and overdue measures.
‘Events of recent days have created more heat than light. Government and regulators need to plot a clear and consistent path on energy market reforms which puts the interests of consumers at the heart of the process. Regulation, legislation and effective competition all play a role in delivering an energy market that works for, not against consumers.
‘Ofgem proposals will not answer every question. Consumers still doubt the relationship between wholesale costs, retail prices and group profits. But we welcome this as a very positive step towards making the market work better for consumers.’
Pricing
‘Simplifying energy tariffs by requiring a standard charge and one unit rate, cutting the number of tariffs, and highlighting key information on bills, should help give customers much greater clarity on pricing.
Switching
‘Energy switching rates have been falling.1. While consumers should not have to continually move supplier to get a decent deal, it is welcome that Ofgem has taken action to address some of the complexity and confusion which can put-off consumers from switching. Ending confusing discounts, having a standard measure to compare tariffs and limiting the number of tariffs should all make it easier for consumers to compare and switch.’
Vulnerable consumers
‘Vulnerable consumers are hit hardest by price rises, are less likely to shop around and are more likely to be on the most expensive rates. Extra steps should be made to alert vulnerable households if they could be on a better deal. Thought will be needed on how best to reach this group and encourage them to take up a cheaper rate. We believe extending data-matching, which is currently used to identify older vulnerable customers, will be essential to making this work.’
Notes to Editors:
- The most recent energy switching figures show a fall in switching levels from around 20% of customers switching in 2008 to 15% in 2012. (Source DECC public attitudes survey July 2012)