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22 November 2012: Government energy proposals fall short



The government’s plans to shake-up the energy industry fall well short of their aim to provide cheap gas and electricity to consumers across the country experts say. The proposals announced by Energy Secretary Ed Davey suggest that all suppliers should be limited to four tariffs only, in an effort to simplify the choices that customers face when making a decision about their energy supplier.

However, Mark Todd, director of independent price comparison site energyhelpine argued: “Reducing the number of tariffs available, with customers moved to their supplier’s cheapest tariff will simply reduce choice. The obvious step for energy companies faced with these regulations will be to pull their cheapest tariffs, leading to a sharp increase in bills and nowhere for consumers to turn.” 

He added, “What is even more staggering is that these policies will only come into effect by the end of Summer 2014. We need action now, not in over two years time. Cameron and Davey might be well-meaning but have been staggeringly ill-advised. Having been backed into a corner by Cameron’s ill-prepared statements promising legislation in this area, they are now posing as warriors for the consumer, when in reality they are playing headline politics. 

Mr. Todd has proposed five tactics the government could use in order to properly tackle the energy issue, they are:

1.      Cut stealth taxes in bills by 50 per cent, delivering an immediate £50 price cut in a typical bill
2.      All direct debits credits over £100 automatically given back to customer at end of each quarter or penalties to the energy company that are given back to consumer
3.      Directly inject competition – a nationalised, low-cost energy supplier – a kind of publicly owned Ryanair or easyjet to shake up the market
4.      Simple standardised bills with tariff names on top and a glossary on the back
5.      Ban complex pricing structures that have confused customers

Todd concluded: "Now is the time for government to show its mettle, move away from the gimmicks and start listening to the concerns of the public and the advice of those fighting to ensure Britain can keep the heating on this winter.”


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