As the Competition and Market Authority’s (CMA’s) energy market investigation reaches its final stages, Which?’s Fair Energy Prices campaign is calling for action to tackle the millions of households on standard tariffs.
The government’s latest data shows switching levels over the past two years have failed to reduce the numbers on standard tariffs. Since early 2014, the levels of people on standard electricity tariffs have remained at an average of 75 per cent. This means 21 million customers are on these tariffs, which cost on average about £54 (or 9 per cent) more than other deals. It is a similar story with standard gas tariffs, which stalled at 73 per cent, or 16 million customers, at the start of 2014. A standard gas tariff costs around £75 (or 10 per cent) more than other deals.
According to the government, in 2014, 11 per cent of people switched electricity supplier and 10 per cent switched gas supplier, but this hasn’t significantly reduced the numbers on standard tariffs. Retail Market Review reforms have not sufficiently increased consumer engagement with this essential market. The regulator must reverse this trend if its inquiry is to result in a competitive market with fair prices.
When the CMA reports next year, we want it to: tackle the number of people on poor value standard tariffs; make it easier to compare and switch; and penalise suppliers who fail to protect the most vulnerable customers.
More than 330,000 people have already pledged their support for Which?’s campaign.
Richard Lloyd, executive director, Which?