Citizens Advice renews call for price hike protection
Consumer champion responds to Utility Week snap survey on British Gas price rise
Citizens Advice has said that more needs to be done to protect “loyal customers” from energy price rises.
A snap Utility Week poll in the wake of last week’s British Gas shock price rise found that 82 per cent of people would support government intervention to halt energy price hikes.
Earlier in the week, British Gas had announced a 12.5 per cent price rise, effective from 15 September.
Citizens Advice director of energy, Victoria MacGregor, said: “The anger and concern voiced by energy customers about recent price rises reinforces why action is needed to protect loyal customers from soaring energy costs.
“But many people aren’t switching year on year - which is why we want the regulator to protect those who can least afford another price hike and cap energy bills for those eligible for the Warm Home Discount.”
She added: “Suppliers have a role to play too and we want them to have yearly targets to move more of their customers off expensive standard variable tariffs. If these targets were not met then customers who have not switched should then have their energy bills capped.”
Other major energy suppliers stopped short of supporting direct market intervention in their responses to the Utility Week survey, carried out in partnership with consumer research company Harris Interactive.
Asked about market intervention, a spokesperson for Scottish and Southern Electricity said: “This is a question for government and the regulator. However, SSE will engage constructively with both Ofgem and the department for business, energy and industrial strategy, as they develop any proposals for the benefit of customers.
“However, we believe that competition, not caps, is the best way to deliver positive outcomes for customers, and any proposed cap should therefore be targeted in nature and set based on a full understanding of all the costs and risks associated with supplying energy.”
Eon UK also said increased competition was the best way to drive value for money for customers, claiming that previous interventions in the market have led to poorer outcomes for customers.
The company cited previous restrictions on the number of tariffs that suppliers could offer, a move that was recognised by the Competition and Markets Authority as harming innovation.
A spokesperson for Npower added: “We encourage all customers to shop around and find the best deal suited to their needs. We are proactive in telling our customers that their fixed product are ending and give them other options to choose from, including highlighting our own cheapest tariff.
“Around 48 per cent of [Npower] customers are on standard variable tariffs, (this figure does not include prepayment customers as their prices are governed by Ofgem’s prepayment cap) a lot less than British Gas and SSE, who according to recent reports have more than the industry average of 70 per cent."
Over half of existing British Gas customers responding to the Utility Week survey said that they are now unlikely to stay with the company as their energy provider. Furthermore, 85 per cent of those who are not currently British Gas customers said they were unlikely to consider switching to one of supplier’s tariffs.
Two thirds (67 per cent) of survey respondents said they were worried about their supplier also raising prices in the wake of the British Gas announcement.
The survey also revealed that few people were aware that British Gas did not plan to increase prices for their most vulnerable customers.
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