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.

PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Reach Volunteering: Trustee – PR& Marketing, Social Care, Commercial skills

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...

Reach Volunteering: Charity Treasurer

Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...

SThree: Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...

Ampersand Consulting LLP: Markit EDM (CADIS) Developer

£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...

Day In a Page

In a world of Saudi bullying, right-wing Israeli ministers and the twilight of Obama, Iran is looking like a possible policeman of the Gulf

Iran is shifting from pariah to possible future policeman of the Gulf

Robert Fisk on our crisis with Iran
The young are the new poor: A third of young people pushed into poverty

The young are the new poor

Sharp increase in the number of under-25s living in poverty
Greens on the march: ‘We could be on the edge of something very big’

Greens on the march

‘We could be on the edge of something very big’
Revealed: the case against Bill Cosby - through the stories of his accusers

Revealed: the case against Bill Cosby

Through the stories of his accusers
Why are words like 'mongol' and 'mongoloid' still bandied about as insults?

The Meaning of Mongol

Why are the words 'mongol' and 'mongoloid' still bandied about as insults?
Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible