Brendan Burgess
Founder
- Messages
- 52,099
Theresa May's energy price cap could last until 2023
The British electricity and gas suppliers have very high standard variable rate tariffs which the vast majority of customers are on. There is competition for switchers, but after switching they go back onto the SVR.
But most people never switch and the British government has decided that they need protection.
"The draft legislation also reveals that the cap will be an absolute one. A relative cap, for which some MPs have been pushing and which would limit a supplier’s most expensive tariff to a percentage above their cheapest deal, has been ruled out.
The prime minister reiterated her claim that she had to act because the market is broken, a charge the big energy companies reject.
“I have been clear that our broken energy market has to change – it has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much,” said May."
Interestingly, Which? has questioned the wisdom of the cap
"Which?, a consumer organisation which was enthusiastic about the limited cap for 1 million people, said ministers needed to be careful the wider one did not backfire.
Alex Neill, the group’s managing director of home products and services, said: “For millions of consumers worried about their energy bills, a cap might sound like a positive move. However, the government must guard against any unintended consequences that undermine customer service and push up prices as a whole.”
In Ireland about 125,000 borrowers are paying over 4% on their SVR mortgage rate with many paying 4.5%. They could switch to a lower rate but don't.
Brendan
The British electricity and gas suppliers have very high standard variable rate tariffs which the vast majority of customers are on. There is competition for switchers, but after switching they go back onto the SVR.
But most people never switch and the British government has decided that they need protection.
"The draft legislation also reveals that the cap will be an absolute one. A relative cap, for which some MPs have been pushing and which would limit a supplier’s most expensive tariff to a percentage above their cheapest deal, has been ruled out.
The prime minister reiterated her claim that she had to act because the market is broken, a charge the big energy companies reject.
“I have been clear that our broken energy market has to change – it has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much,” said May."
Interestingly, Which? has questioned the wisdom of the cap
"Which?, a consumer organisation which was enthusiastic about the limited cap for 1 million people, said ministers needed to be careful the wider one did not backfire.
Alex Neill, the group’s managing director of home products and services, said: “For millions of consumers worried about their energy bills, a cap might sound like a positive move. However, the government must guard against any unintended consequences that undermine customer service and push up prices as a whole.”
In Ireland about 125,000 borrowers are paying over 4% on their SVR mortgage rate with many paying 4.5%. They could switch to a lower rate but don't.
Brendan