What can be done to fix the UK energy market? SSE’s decision to match price rises introduced by the other ‘Big Six’ power firms is by this stage a weary inevitability.
Was it ever likely that one of these companies would buck the trend, after Ofgem raised the cap on prices, creating genuine competition? or would SSE fall into line leaving the biggest companies offering customers virtually identical tariffs – choice but no choice, like a cosy cartel? There’s no longer any fun in guessing.
The energy market is entirely artificial. There is no real choice, there is no real competition and any attempts to change that seem doomed to failure.
When regulators tried to end the problem of many customers being moved onto expensive ‘default’ tariffs, the Big Six merely changed the labels, moving customers onto new fixed tariffs which were almost as expensive. The plan to encourage smaller ‘disrupter’ firms to enter the market has had limited success. The latest attempt to protect consumers, the price cap, was always flawed, interfering in the market to make it more artificial still.
Earlier this year the Big Six were all charging an average of £1,133 year, just £4 short of the Ofgem price cap. At least 27 energy suppliers of all sizes set similar tariffs. Now after allowing companies to increase prices, the average user will face an annual bill of £1254, whichever Big Six provider they choose. But the cap wasn’t meant to be a target. This isn’t a market, it’s a farce
Ofgem insists price rises are “only due to actual rises in energy costs”. But customers remember how little prices changed during three recent years of wholesale energy price reductions, and trust in the suppliers is all but gone.
But there are alternatives. Consumers seem to think green tariffs and smaller suppliers are more expensive but many of these now offer a better deal. The entire energy market needs rethinking from the ground up. But in the meantime, switching regularly is the best protection from ever-rising energy bills.
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