24 AUG 2017

Fairer energy prices

Kent Messenger Column - 24-08-17

Hands up if you are this person; The last time you moved house you adopted the gas and electricity supplier already in place there, haven't changed since, and your supplier is one or more of the big six (British Gas, EDF, E.ON, N-power, SSE or Scottish Power)? The chances are that you are also being charged at your supplier's 'standard variable tariff' (SVT) which is the most expensive rate. Regrettably, until this week at least, I was that person.

Around a third of domestic customers are supplied by their 'historic supplier' and well over two thirds of them are on the SVT, many being vulnerable and needy people who find difficulty engaging with the switching process.

In Maidstone & The Weald there are an estimated 24,000 families paying almost £300 a year more than they need to, on average. That's almost seven million quid needlessly disappearing from the local economy.

What is even more unsatisfactory is that certain companies use some of the high profits from SVT accounts to fund illusionary short-term low rates, sucking in new customers ahead of future price hikes.

In my view, because energy is an essential service, people should not be penalised just because they cannot, or choose not to, engage in the market process. Price capping has long been mooted but government should be wary of blunt intervention in a free market.

Instead, I am supporting a Commons backbench proposal for a "relative" price cap. This limits a supplier to a 6% difference between their cheapest and most expensive tariffs available at any one time. It is squarely aimed at the big companies who exploit their SVT customers but doesn't restrict price competition between suppliers.

Having just saved a massive 30% of my gas and electricity bill, I strongly recommend constituents to visit OFGEM approved switching sites and see what savings you can make. Here are two; www.uk.trustpilot.com and www.energyhelpline.com.

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