In the run up to our fourth annual retail energy conference, Moneysupermarket’s Energy Commercial Manager Stephen Murray shares his opinion on the government's decision to place a price cap on energy supplier's variable tariffs (SVTs):
I keep coming back to the domestic energy market, and the political rhetoric and numbers game just doesn’t add up.
“The energy market is broken.” “I haven’t switched, it’s too much hassle.” These are both quotes attributed to our current Energy Secretary, Greg Clark. So what, exactly, is “broken”?
Yes, it’s true that the most vulnerable consumers need more support to access the market, and it’s clear that all stakeholders must do more to work together (using all data at our disposal) to identify these customers and help them get the lowest prices.
But what about the majority?
We’ve got 50+ suppliers, increasing switching levels reported by Energy UK, tariff innovation from emerging and established suppliers and savings for the average customer of £300. Does that sound like a broken market?
Or is the problem that we’re not doing enough to make customers trust and willingly engage with that market?
The proposed price cap is likely to be counterproductive. It will convince consumers that they don’t need to engage with the market because the Government and Ofgem have sorted out their energy for them.
Price increases from the Big Six in 2017 have averaged £93.46 for customers on standard tariffs. Let’s imagine we’ll see a similar price rise in 2018 along with the introduction of the much-vaunted £100 reduction on standard tariffs from the implementation of the cap.
The net effect? Customer savings of £6.54. Meanwhile, savings on MoneySuperMarket.com (5/10/17) for the average customer stand at £288. Today. Available now.
Like I say, it just doesn’t add up.
Stephen Murray, Energy Commercial Manager at MoneySuperMarket, will be speaking at Cornwall Insight’s fourth annual retail energy markets conference on 22 November.
The conference, Fairness and Competition in the Retail Energy Market, takes place in London. Experts from Cornwall Insight will debate these issues in more detail alongside industry leaders, policy-makers and consumer representatives.
Book now for £595 + VAT per delegate.