Government will ‘act on’ £2bn customer detriment

The government will “act on” the £2 billion of customer detriment figure the Competition and Markets Authority raised in its energy market report, business and energy secretary Greg Clark has said.

“Once you know that you have a duty to act on it,” Clark said at a fringe event at the Conservative party conference. “Knowing that £2 billion of detriment exists, we have to act on this in the next few weeks and months.”

Rumours have been circulating that the government is considering “new options”, such as extending the CMA’s proposed price cap for prepayment customers to other households on low-income, pension credit or ‘cold weather’ benefits.

The Sun reported that industry experts are pushing the government to force gas and electricity giants to automatically put customers on cheaper deals if they haven’t switched for a set period of years.

But, also at the Conservative conference, price comparison site Which? urged the government not “meddle” with the energy market in the wake of the CMA’s remedies.

Which? managing director Alex Neill told Clark that the recommendations being applied should be allowed to bed in before more interventions are made.

She said: “Don’t meddle just yet. Look at the history of well-meaning but poorly judged interventions.

“What Ofgem needs to check is that the interventions do not damage competition or cause further detriment.”

Neill told Clark that the energy companies need to be able to test and implement the remedies before further changes are forced upon them.

British Gas managing director Sarwjit Sambhi agreed. He told Clark and delegates that imposing further interventions on the market could limit innovation and would be regressive on customers.