Change is needed in the Energy industry
Reports suggest that £1.2 billion is the figure we have jointly overpaid the big 6 energy firms, at a time when in the past decade electricity bills have increased by 75% and gas bills have increased by 125%, with most of us going through strong wage stagnation.
The energy regulator Ofgem has been very soft with the energy companies, stating “there is no evidence energy suppliers have increased prices faster than they have reduced them”.
Along with SSE, Scottish Power, Centrica, N Power, E On, and EDF arguing that the energy market they dominate is working well…. I suppose that they would say that when combined annual profits have increased by 410% in the last 4 years.
However the Competition and Markets Authority (CMA) 1 year into their investigation of the energy sector has stated that it’s not working well.
Energy bills have been 5% higher than they should have been and if we as the consumer don’t question the overcharge the big 6 will more than happily take your extra cash!
Should we spend all our time constantly double checking that our energy company has charged us the right amount? Or is it time that the government and regulatory bodies tackled this problem head on?
The breaking up of the firms who control about 92% of the energy supply in the UK market has been mentioned and it’s something that would be beneficial to all, with increased competition hopefully leading to lower prices. Currently the energy industry has an oligopoly feel to it.
The government needs to focus their efforts on the smaller energy firms that are trying to break into the market, such as the likes of Ovo Energy and Spark Energy, this increased competition will not just bring lower energy bills for customers but hopefully better customer service to the public.
How do we change this industry?
The Competition and Markets Authority launched its investigation last July and will continue to publish its findings, initial views show there is a lack of competition in the industry.
Do the government need to do more? They currently spend £3.8billion in subsidies for the energy industry, that money can be spent more wisely in tackling the problem that the British public seem to be facing year after year, with the big 6 over charging, raising prices, price colluding and so on, it seems it’s a different problem every year that the consumers are faced with.
Any government regulations that are enforced are likely to have a pretty long lag time, so what can we do in the short term to stop being over charged?
Change Energy Provider
Jim Rohn states “ Change although beneficial is not something we enjoy doing”. About 40% of domestic gas customers at Centrica have been with them for more than 10 years and unfortunately you end up getting punished for this, it stated those who remain on dual fuel deals are routinely charged up to £234 more a year than those who switch, according to results released by the CMA.
So a short term solution is to SWITCH energy providers, simply log onto Uswitch and compare the best deals, you could be saving around £200 a year by doing this!
In the long term we need trust to be built back up in the energy industry, this needs to be led by the CMA and the government working closely together, if not we face the same news stories again next year!