Commenting on the Ofgem price cap for 4 million prepayment customers, Caroline Flint said:
“This price cap offering protection for prepayment customers should be just a start, not the last word in tackling the failing energy market.
“If the Prime Minister is going to stand up for the ‘just about managing’ she needs to do far more, beginning with a protected tariff – a price cap – for the two thirds of households on standard variable tariffs.
2016 saw little respite from rising prices for most consumers, and the latest announcement by nPower of a 9.8% price hike for dual fuel customers, is a sign that the Big Six are set to ratchet up prices once more.
“Theresa May’s government is short on new ideas. On Sunday, her government had to borrow housing policies wholesale from Labour’s manifesto. Today, I would welcome them borrowing another idea – a protected tariff – which would offer immediate protection for 20million customers, not just 4 million with prepayment meters.
“Ofgem already accepts that customers on standard variable tariffs are paying more than they need to. Ofgem also admits that most customers do not, and may never switch supplier.”
Ms Flint highlighted the advice on Ofgem’s own website which states: “Around 20 million energy customers (mainly with large suppliers) in Britain are on ‘standard variable’ rate tariffs, and are potentially missing out on significant savings.”
Rachel Fletcher, Ofgem senior partner for consumers and competition, told a conference in October that the UK had a “two tier market where only 30% of customers capture the benefit of vigorous competition.”
The House of Commons Library confirmed that the average dual-fuel bill on the Standard Variable Tariff offered by one of the Big Six energy suppliers fell by 3% over the course of 2016. However, the “best deals” in the market have risen in price considerably – the cheapest available tariff rose by 10.5% during 2016.