Editorial: Not the way to tackle rising energy prices

With the Government in confusion, where are consumers? No better off than before

Share
Related Topics

So much for drawing a line under the Government's shambolic recent performance. In an apparently unscripted addition to Prime Minister's Questions on Wednesday, David Cameron told MPs that the Government is to use the law to force energy companies to give their customers the best possible tariff.

The proposal would be startling enough by itself, signalling a sudden, radical intervention in of one of Britain's more complex industries. But it was also news to both the energy companies and, it appeared, to the Department for Energy and Climate Change. Was the Prime Minister boldly seizing the initiative on an issue close to voters' hearts, or did he stumble – detail-lite – into a grave policy blunder? Disquietingly, it would seem to be the latter.

In the immediate aftermath of Mr Cameron's bombshell, DECC officials made general noises about the Government helping customers find the best deal, but stopped conspicuously short of confirming that companies would be forced to transfer them automatically. The Tory energy minister summoned to answer questions in the Commons did little better. For all his flamboyant style, John Hayes could only bluster about "a number of options" being considered. Hardly a clarification. Meanwhile, the Liberal Democrat Secretary of State dodged the issue altogether. And even the Prime Minister's own attempt at clarification – on the way into a European summit – only reaffirmed a general commitment to ensure consumers access to the lowest tariffs.

A sorry state of affairs, indeed. It is easy enough to understand how the situation came about. Squeezed between public outrage at last week's sharp rise in energy bills, and the expectation of more tough talk on the subject from the Opposition, Mr Cameron grabbed the opportunity to appear both caring and decisive. Except that his impromptu announcement has confused consumers, caused havoc in the industry, and added to the worrying impression that his grip on policy is not all it might be.

Where does all this leave consumers? In all likelihood, no better off than before. The most probable explanation for the debacle is that Mr Cameron was over-egging an existing plan – in place since April – to force companies to give customers details of the best tariffs available to them (a proposal which is, indeed, to be included in the Energy Bill due next month).

Nor is the Prime Minister's more far-reaching proposal either as simple or as attractive as it sounds. First, it would damage competition. With such a chunk of bills at the mercy of global commodity prices, the creation of multiple tariffs – which vary according to payment methods, usage patterns, and the like – is central to rivalry between suppliers. Heavy-handed Government intervention would simply tilt the market towards a single price band, leaving customers even less choice.

Second, even if it were desirable, such a plan would be nigh-impossible to put into practice, given that it would require suppliers to have far more information about each customer than is currently available to them. Again, the result would be fewer tariffs. Third, even if it were possible, such a plan would have the opposite result to Mr Cameron's stated aim of cutting consumers' costs. In fact, by putting an end to the pricier packages, it might be expected to raise the average bill.

Britain's energy market most certainly needs attention. Pricing is too complex and too opaque, adding to consumers' considerable mistrust; switching between suppliers is too difficult and unrewarding. But simplistic broadsides solve nothing. By adding to the confusion, the Prime Minister has made matters worse.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped commission: SThree: Does earning a 6 figu...

Recruitment Genius: SEO Executive

£18000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: New Lift Sales Executive - Lift and Elevators

£35000 - £40000 per annum: Recruitment Genius: A challenging opportunity for a...

Day In a Page

Read Next
 

For all his faults, Russell Brand is utterly sincere, something politicians should emulate

Janet Street-Porter
 

Never underestimate the power of the National Trust

Boyd Tonkin
The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss