Later this year the Government’s Energy Price Cap will come into effect to help consumers struggling with the increasing costs of heating and lighting their homes. This will force energy suppliers to cap the costs of their annual tariffs which will save households an average of £75 per year. Those on the worse energy deals will save up to £120 per year.
Consumers don’t have to do anything to start saving money – the pressure will instead be on the energy companies to lower their prices and deliver savings straight away. However to get the best deals and save money, switching tariffs is still the best way and the Government is making sure that people have all of the information they need to do this.
I have campaigned relentlessly on consumer issues, developing a close working relationship with Which? – the consumer association – to ensure that Government works to provide people with the information and protection they need when they buy goods and services.
As part of this work, I worked with fellow MPs to bring in a number of measures which would make switching energy tariffs easier through greater transparency from the energy companies. Measures introduced included forcing energy suppliers to be clear about the amount of energy people were using. We made sure that suppliers had to provide usage information on bills and that they had to inform households when their tariff was about to run out and what other tariffs were available.
These measures are working and last year we saw 5.5 million consumer switch their energy supplier – a record number which suggests more people are becoming aware about the better deals available to them. This is helped by the fact that there are almost 60 energy companies to choose from which is creating more and more competition.
Of course the Government's continued rollout of smart metres is also helping as people are constantly monitoring their energy use and costs. The independent National Audit Office estimates that smart meters will lead customers to reduce their energy use significantly and reduce annual dual-fuel bills by more than 5%. Furthermore, it is the energy companies themselves who have borne the capital costs of the creation, installation & roll out of smart meters.
I along with other MPs also made sure that it was not only easier to see how much could be saved by switching, but also make the entire switching process easier so that people aren’t deterred. Now, consumers only need to spend about 10 minutes on the phone, with their postcode and a copy of a recent energy bill to hand. Gone are the days where multiple phone calls are required to your old provider and new provider – now the suppliers do it all for you.
We also made sure that a similar system was in place for banking – making it easier to see the best rates and switch accounts.
So whilst delivering a competitive and thriving market maintains the best driver of value and service for customers, the Government is prepared to take action where needed. In this case we are providing price protection to often vulnerable consumers who find themselves on the worst tariffs.
