Ian Marlee: Erosion of consumer trust in energy market

 

The challenge facing Britain's energy market has probably never been greater than it is today. Public confidence in the Big Six suppliers has fallen to extremely low levels as reflected in The Independent's Fair Energy campaign. Poor supplier behaviour and the complexity of the energy market have contributed to an erosion of consumer trust.

Yet - as Ofgem's look at energy security Project Discovery, showed - Britain is looking to the energy industry to deliver up to £200 billion investment in cleaner power generation, networks and energy infrastructure between now and 2020. Over that period bills will need to rise to pay for this investment on top of increases in the price of gas which have been behind the doubling of energy prices since 2005 when Britain lost its self-sufficiency in gas. So consumers are right to ask whether the market structure is right and whether re-regulation of retail prices is the answer.

Ofgem's mandate is set by Parliament with a focus on making competition work to protect consumers. Crucially - a return to price caps doesn't necessarily mean bills will fall. A comparison with the continent, where energy prices tend to be more strongly regulated and attract higher taxes, shows that Britain has some of the lowest household energy prices.

But the market is not working as well as it should. Our Retail Market Review last March showed that suppliers had failed consumers by not fully embracing our previous reforms in 2008 and that competition was being stifled by a combination of tariff complexity, poor supplier behaviour and lack of transparency. We are determined to put a stop to this and have put forward the most sweeping set of reforms since liberalisation began to create a simpler, clearer and more competitive market.

Our proposals for simpler tariffs, more transparent bills and information, compulsory standards of conduct and proposals to open up the wholesale electricity market were not popular with large suppliers when we announced them. However, over the last six months we have seen an encouraging shift in the position of many of the Big Six suppliers.

There is now a recognition that they need to radically change the way they treat consumers and that the current complexity must be swept away to create a more competitive market. We want energy suppliers not only to embrace our reform programme, but to be more responsive to their consumers. It should not need the regulator to step in and ensure companies treat their consumers fairly. In a fully competitive market suppliers should be competing to win consumers over with good service and keen prices.

If the industry grasps the opportunity our reforms offer it can start to restore consumer trust in energy suppliers. This is vital if consumers are going to be asked to pay for the investment Britain needs.

Until then Ofgem will continue to force the pace of change by taking a tough stance on enforcement and by driving forward changes to increase the competitive pressure on all energy suppliers. We believe a market where competition works offers the best guarantee that consumers pay no more than they have to for their energy.

* Ian Marlee is one of Ofgem's senior officials.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Customer Service Administrator

£13000 - £15000 per annum: Recruitment Genius: Are you passionate about custom...

Recruitment Genius: Dialler Administrator

£22000 - £25000 per annum: Recruitment Genius: Main purpose: Under the directi...

Ashdown Group: Contracts Manager - City of London

£35000 - £37000 per annum + benefits : Ashdown Group: Contracts Manager - City...

Guru Careers: Tax Manager / Accountant

£35 - £50k DOE: Guru Careers: A Tax Manager / Accountant (ACA / CA / CTA) is n...

Day In a Page

Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen
RuPaul interview: The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head

RuPaul interview

The drag star on being inspired by Bowie, never fitting in, and saying the first thing that comes into your head
Secrets of comedy couples: What's it like when both you and your partner are stand-ups?

Secrets of comedy couples

What's it like when both you and your partner are stand-ups?
Satya Nadella: As Windows 10 is launched can he return Microsoft to its former glory?

Satya Nadella: The man to clean up for Windows?

While Microsoft's founders spend their billions, the once-invincible tech company's new boss is trying to save it
The best swimwear for men: From trunks to shorts, make a splash this summer

The best swimwear for men

From trunks to shorts, make a splash this summer
Mark Hix recipes: Our chef tries his hand at a spot of summer foraging

Mark Hix goes summer foraging

 A dinner party doesn't have to mean a trip to the supermarket
Ashes 2015: With an audacious flourish, home hero Ian Bell ends all debate

With an audacious flourish, the home hero ends all debate

Ian Bell advances to Trent Bridge next week almost as undroppable as Alastair Cook and Joe Root, a cornerstone of England's new thinking, says Kevin Garside
Aaron Ramsey interview: Wales midfielder determined to be centre of attention for Arsenal this season

Aaron Ramsey interview

Wales midfielder determined to be centre of attention for Arsenal this season
Community Shield: Arsene Wenger needs to strike first blow in rivalry with Jose Mourinho

Community Shield gives Wenger chance to strike first blow in rivalry with Mourinho

As long as the Arsenal manager's run of games without a win over his Chelsea counterpart continues it will continue to dominate the narrative around the two men
The unlikely rise of AFC Bournemouth - and what it says about English life

Unlikely rise of AFC Bournemouth

Bournemouth’s elevation to football’s top tier is one of the most improbable of recent times. But it’s illustrative of deeper and wider changes in English life
A Very British Coup, part two: New novel in pipeline as Jeremy Corbyn's rise inspires sequel

A Very British Coup, part two

New novel in pipeline as Jeremy Corbyn's rise inspires sequel
Philae lander data show comets could have brought 'building blocks of life' to Earth

Philae lander data show comets could have brought 'building blocks of life' to Earth

Icy dust layer holds organic compounds similar to those found in living organisms