Energy market has 'long way to go to work for all consumers'

Consumer groups have welcomed plans to protect the most vulnerable customers on pre-payment meters, but warned there is still "a long way to go" before the energy market works for everyone.

Watchdog Which? said the cost to consumers of an uncompetitive market now stood at £1.7 billion, and called on all energy suppliers to "stop resisting change and start working harder to restore trust in their industry".

Which? executive director Richard Lloyd said: "After two years of this energy inquiry, there is still a long way to go before we will have an energy market that works for all consumers.

"While it is right to ensure that vulnerable customers on pre-paid meters (PPMs) are quickly protected, there are many people struggling with their bills who will not be helped by this price cap.

"And the regulator must make sure that releasing customer data to rival suppliers is done so that it genuinely helps people switch from the most expensive tariffs to better deals, rather than result in more unwanted nuisance calls."

Citizens Advice also backed the introduction of a temporary price cap for PPM customers, saying new research showed those on the cheapest PPM dual fuel arrangement pay on average £235 more per year than those on the cheapest direct debits.

Citizens Advice chief executive Gillian Guy said: "The UK energy market doesn't work for all consumers.

"Pre-payment meter customers get a particularly shoddy deal - it is more expensive, inconvenient to top up and consumers are usually excluded from the cheapest energy deals.

"It is good the CMA (Competition and Markets Authority) has acknowledged pre-pay customers need better protection and a price control is a very positive step for the millions of households who use this payment method and often get a raw deal."

Juliet Davenport, chief executive of green energy company Good Energy, also agreed it was "right that the most vulnerable customers get some protection".

She said: "There are some good measures proposed which will mean customers get a better deal.

"Opening up the customer database and relaxing the four-tariff rule could help reluctant customers get better information.

"Price comparison websites have played a role in starting to get larger numbers of customers switching. Customers now place a lot of trust in them so it's important that this trust is maintained as they continue to gain influence."