The Government proposed a price cap to prevent millions of customers being stung by expensive energy deals.
Now Ofgem has the responsibility to put this in place and police it, and we welcome their decision to start by supporting the most vulnerable customers.
The safeguard tariff propsed would put a cap on the price an energy company can charge the two million people who are eligible for the Warm Homes Discount. But it needs to go much further than that if we are to tackle what is a broken market. Two thirds of households across the UK are currently being ripped off by their energy supplier, on expensive standard variable deals.
I spoke to Five Live’s ‘This is Money’ this week, on why there’s much more work to be done (listen in from 21m30s).
A better way
At Bristol Energy, we think there’s another way. One that doesn’t overcharge people for heating their homes. And that doesn’t penalise customers with wildly expensive prices when they come off their fixed rate deal.
We keep our prices fair. We save people who switch to us around £219 per year on their bill on average. And we’ve been in business for less than two years. If we can do this, then so can others.
So why do we need a cap?
Although we know it’s very easy to switch provider, my 26 years in the industry tells me that this doesn’t matter. Sadly, only around 1 in 6 of us switch regularly to independent, smaller suppliers. This is a diverse and active part of the market, but many people just don’t shop around for deals.
They simply want a reliable electricity supplier that they can trust to give them a fair price. And they’d like this to be as easy and simple as possible.
Putting a cap on standard variable tariff prices across the board would stop the Big Six suppliers penalising customers for their loyalty for years on end. And I hope that Ofgem will come to the same conclusion.
In the meantime, the onus is also on suppliers to treat people fairly and responsibly. Running an energy company comes with great responsibility – something that we at Bristol Energy take very seriously.
Peter Haigh: Managing Director, Bristol Energy