Energy bills still a hot topic

Energy prices and what the government could or should do about them was one of the hot topics in the general election earlier this year.

And while the solutions may have differed, the one thing all politicians seemed to agree on was that too many people were being ripped off.

At Which? we were delighted the debate was happening. We’ve been saying for far too long that action is needed, especially for the millions of people stuck on expensive standard variable tariffs.

So the publication of a draft Bill which could temporarily cap energy prices will be welcomed by many people struggling with their bills - but we will be watching very carefully to make sure there are no unintended consequences for consumers as a result of this legislation.

For instance any cap must not cause long term price increases. Standard tariff customers have seen bills rise by as much as 40 per cent for gas and 35 per cent for electricity over the last decade. And while a cap might see prices drop for these customers in the short term, it would be worrying if the energy firms used this as an excuse to stealthily increase prices for more engaged customers, who have regularly switched to the cheapest fixed term deals.

The government and Of- gem - the energy company regulator - must ensure there’s a rigorous process in place to make sure a cap is set at a fair level and that the market must be continually monitored.

It must also not stifle innovation such as smart meters which help customers monitor their energy, or remove incentives for energy firms to improve their customer service. The Big Six suppliers all sit in the lower half of the Which? annual energy satisfaction survey because of poor complaint handling and inaccurate bills.

What the Government should really focus on is how to increase competitiveness. We know that people are collectively overpaying by £1.2bn because of a lack of competition in the energy market and that has to change.

Ultimately at Which? we believe that the result of the cap must be a better functioning, truly competitive energy market, where everyone is getting a good deal.

We don’t think it’s too much to ask.

Send me your consumer questions askalex@which.