FIVE QUESTIONS ON…

What’s happened? Gas and electricity prices are to be capped temporarily for the UK’s 4 million households on prepayment meters. Meanwhile, a new database of customers who haven’t switched in three years will be made available to rival suppliers and comparison sites to encourage them to contact people paying over the odds for their energy. The plans were announced this week by the Competition and Markets Authority (CMA) after a two-year investigation into the energy market. What’s the aim? The CMA said that allowing competing suppliers and price-comparison websites to alert customers to the savings they can make “will shake up the industry”. The new database will be operated by the energy watchdog Ofgem to ensure impartiality.

For customers on prepayment meters, including some of the most vulnerable households, a transitional price control will be introduced until 2020 – after which, they should be able to benefit from the best prices through the rollout of smart meters. Are they good ideas? Not everyone thinks so. Richard Lloyd of consumer group Which? warned that there are many people struggling with their bills who will not be helped by the price cap. He added that releasing customer data to rival suppliers could result in more unwanted nuisance calls.

That fear was taken up by Will Hodson of consumer collective The Big Deal, who said: “The proposal would take exploited customers out of the pan and into the fire of a thousand cynical sales pitches.” When will the changes happen? There’s no timescale. The changes will be brought in by CMA orders and recommendations to Ofgem and the Government. The big six energy firms were accused of overcharging. Have they got away with it? “Extensive lobbying has resulted in these pathetic watered-down recommendations that will have little impact,” said Laura Hill of Fuel Poverty Action.

Simon Read