Energy market referred for competition investigation
Citizens Advice and Consumer Futures responds to the Ofgem announcement on competition referral.
Citizens Advice Chief Executive Gillian Guy said:
“Households have been bearing the brunt of a failing energy market for too long. We’ve been calling for a competition inquiry since 2007. It’s important this long awaited investigation gets to the root cause of rising prices and results in a competitive and transparent market that works for all consumers.
“Prices are up 33% since 2010, seven times the increase in annual earnings. Bad service, mis-selling scandals and rising prices have all meant that trust in the industry is almost non-existent.
“The needs of all households, including those who are on pre-payment meters, should be at the core of an investigation. A market that means energy is unaffordable for some, doesn’t cater for everyone and underpinned by a lack of trust is clearly not working.
“As it stands, the structure of the market does not encourage new entrants or support them to thrive, leaving consumers with less choice. Firms need to be able to compete with each other to drive down prices and increase the quality of service. The inquiry should look at how splitting the retail and wholesale business can be driven through.
“A far reaching, in depth investigation into the market is required to ensure that people are getting value for money and to rebuild trust in this essential service. Nothing should be off limits.”
Citizens Advice and Consumer Futures wants a competition investigation to look at:
If the market is delivering for all consumers including those on prepayment meters
Whether the structure and regulatory environment provides the optimum conditions for a well-functioning, competitive and customer focussed market.
The causes and consequences of the lack of transparency in the market and the impact it is having on competition in the market.
Whether households are paying a fair price.
The impact of the complexity of the markets, from generation to tariff structure, both on competition and the customer.
Barriers to new firms entering and thriving in the market.
Consumer Futures joins Citizens Advice on 1 April 2014.
Notes to editors:
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