5th Nov 2015 15:21
LONDON (Alliance News) - The largest consumer body in the UK Thursday said the amount of UK households on more expensive standard energy tariffs has not fallen despite a big drive from the UK government to try to get people's energy bills down.
The government has been trying to encourage UK consumers to switch suppliers to get a cheaper and better energy deal with the aim of increasing competitiveness, after it was revealed households were losing out on up to GBP200 worth of annual savings by being reluctant to shop around.
A government-backed scheme, the Power to Switch campaign, was launched in early 2015 to try to increase customer engagement in the energy sector, which has been under fire over the last couple of years over concerns about prices, competitiveness and customer service.
When the campaign was launched in February, the UK Department for Energy and Climate Change said it attracted 350,000 visits to the campaign's website in the first month alone, resulting in 130,000 households switching supplier, representing an 80% rise from the same period a year earlier.
The UK government claimed those 130,000 households shared GBP38.0 million in savings.
However, on Wednesday, consumer group Which? said the rise in customers switching energy suppliers has had no effect on the number of people on a standard energy tariff, which is considered more expensive than a variable tariff.
Which? said there are around 21.0 million electricity customers and 16.0 million gas customers who are on a standard tariff in the UK, which is flat from levels spanning back to 2014, suggesting the government's campaign has increased switching levels but has failed to actually save customers money.
"Today we?re calling on the Competition and Markets Authority to use its inquiry to ensure many more people are confident at switching to better deals. It also needs to take action to protect vulnerable customers from paying over the odds, as these are often the people who are stuck on expensive deals," said Which?
The CMA launched an inquiry into the UK energy sector back in 2014 when market regulator Ofgem referred the electricity and gas supply market to the CMA over concerns about features of the market which were preventing, restricting or distorting competition.
Originally, the CMA planned on releasing its findings before the end of 2015 but pushed it back earlier this year. The CMA intends to publish its provisional decision on remedies in January 2016 with a view to reaching its final decision by the end of April 2016.
Richard Lloyd, an executive director of Which?, said the data shows the people who would benefit from switching suppliers are still not moving and said it was up to the industry regulator Ofgem and the CMA through its inquiry to "reverse this trend".
Lloyd said he is expecting the CMA to tackle the number of people on "poor value" standard tariffs, to make it easier to compare and switch suppliers and to penalise suppliers who fail to protect vulnerable customers when it releases its findings next year.
"The CMA must find ways to ensure many more people are confident to switch to better deals and at the same time protect vulnerable customers from paying over the odds," he added.
The traditional 'Big Six' providers comprise of British Gas, which is owned by Centrica PLC, SSE PLC, ScottishPower, E.On, EDF Energy and nPower.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
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