Credit, Collections & Insolvency News
Legislation to cap energy prices for over 11 million households will go before parliament today. This bill will impose a temporary total cap on the cost of all default tariffs.
Responding to the introduction of the Domestic Gas and Electricity (Tariff Cap) Gillian Guy, Chief Executive of Citizens Advice, said “This bill is good news for consumers and is a significant step towards an energy market that works for everyone. Millions of loyal energy customers have been ripped off by their suppliers for too long. This bill should go some way to ending the unacceptable overcharging of loyal customers, and will cut prices for 12 million households currently stuck on poor value default tariffs.
“It’s essential that protections from overcharging remain in place for vulnerable energy customers after the cap is lifted. We look forward to working with the Government to ensure that consumers in vulnerable situations are protected in the long term.”
“But it’s not just energy companies who are taking loyal customers for granted. The Government should now turn its attention to addressing the loyalty penalty in other essential services, including home insurance, mobile phones and broadband.”
Georgie Frost, consumer advocate at GoCompare Energy said “Any move that helps customers save money on their soaring energy bills is to be welcomed, but the introduction of a cap is not without concerns. The energy market is in a state of flux at the moment with the proposed energy cap and suppliers planning to scrap, or already having scrapped, their expensive Standard Variable Tariffs (SVTs). We await more detail about exactly how it would work and how much it will save people. While it is great that the government is focusing its attention on protecting those energy customers who can’t or won’t help themselves and trying to fix the broken energy market, a cap is not without risk to competition.”
“People could be lulled into a false sense of security, believing they don’t need to move suppliers because any cap will guarantee cheap energy bills or a good deal. It won’t! It always pays to shop around and switch, as the savings will generally be much greater. We run the risk of heading into next winter with millions still paying over the odds on default tariffs, assuming that the cap will reduce their bills.”
“The message from policymakers should be clear; protect the most vulnerable and promote the switching revolution which has been gathering pace over the last couple of years. We need to maintain that momentum and encourage more households to take control of their bills. You don’t need to wait months to save money, you can do it now. So the best advice for anyone on an SVT or default tariff is to switch now as they could save hundreds of pounds, rather than wait to see what happens with the energy cap.”
