Ofgem’s energy tariff plan sparks backlash

Staff
By Staff
4 Min Read

MPs and the public have expressed disapproval of Ofgem‘s plans to permit energy suppliers to conceal their cheapest deals from existing customers, according to new polling commissioned by So Energy.

The proposal aims to lift the current ban on suppliers offering cheaper deals exclusively for new customers, potentially allowing hidden discounts for switchers via Price Comparison Websites (PCWs).

However, new polls by So Energy indicate that seven out of ten MPs and nine out of ten energy customers oppose Ofgem’s move.

Over 100 MPs and 2,000 members of the public were surveyed, with 87% of the public advocating for existing customers to have access to the same tariffs as new customers.

So Energy’s independent research suggests that allowing acquisition-only tariffs could result in loyal customers facing bill hikes of up to £64 per year.

So Energy, alongside senior MPs and Citizens Advice, is urging Ofgem to permanently ban acquisition-only tariffs to end the loyalty penalty in the energy sector, mirroring a similar measure introduced by the Financial Conduct Authority in the insurance sector in 2022.

Chief Executive Officer and Co-Founder of So Energy Simon Oscroft said: “Ofgem’s proposal is terrible news for energy customers, as evidenced by this new polling and research.

“It’s a scandal that suppliers may soon be able to hide their best deals from their loyal and often vulnerable customers.

“It will destroy trust by embedding discriminatory pricing practices into the market, just as fixed deals are beginning to reappear in the market.

“Ofgem’s justification for their proposal makes no sense. We know MPs, customers, suppliers, and consumer groups don’t want this.

“Unsurprisingly, the only group supporting Ofgem are price comparison websites who will make a fortune from incentivising an unsustainable race to the bottom on price.”

Tim Jarvis, Ofgem’s Director General, Markets, said: “The Ban on Acquisition-only Tariffs (BAT) was introduced in April 2022 to protect consumers during the energy crisis, and was always designed to be a time-limited measure.

“As the market continues to stabilise, now is the right time to consider removing it.   

“Other measures we have introduced to make the market more resilient – in addition to the role the price cap plays to protect loyal customers from being exploited – lessens the need for a ban on targeted introductory tariffs.  

“We continue to look at the bigger picture as part of our review of standing charges, affordability and debt. A variety of different tariffs have returned to the market and switching has been picking up. We will continue to monitor competitive developments closely.”

Copyright © 2024 Energy Live News LtdELN

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *