The energy price cap has merely protected customers from “reality”, Keith Anderson has said.
During a breakout session on retail energy at consultancy Aurora’s Spring Forum last Thursday (14 July), the Scottish Power chief executive branded the cap a “disaster”, which had not protected customers from soaring bills.
He said: “What it has been protecting people from the last six months is the reality of how much this stuff costs because that’s all it’s doing: it’s delaying the inevitable.”
Anderson said the price cap is an “irrelevance” and “just not fit for purpose” in the context of the current market where annual bills are heading to £3,200, even with this safeguard in place.
But he said fundamental changes to the retail market beyond “little bits of sticking plaster” will be “probably too difficult” until the gas price has stabilised at a lower level than now
Anderson reiterated his previous calls for the introduction of a social tariff for vulnerable customers, arguing that it “seems sensible” to discount energy bills for customers who would otherwise “struggle” to pay and that it is “really weird” that households on prepayment meters must pay higher bills than wealthier counterparts.
He also said that prior to the recent spate of failures by retail energy companies, the government had suffered from a “fundamentally flawed” “obsession” with encouraging customers to switch suppliers.
“It was only a matter of time before we started see a lot of failure just because there was an obsession with switching. “
And the Scottish Power boss claimed that the way the UK retail energy market has been run over recent years had left UK customers more exposed than any others to company failures.
“We’re probably the only market in the world where customers are paying for failures and that’s not a good place to be.”
Jane Walker, deputy director, energy markets & consumers at the Department for Business, Energy & Industrial Strategy (BEIS) said the government would be looking beyond price as it considers its next steps on the review of the retail energy market.