Energy inquiry ‘ducked its responsibility’ by failing to protect the majority of customers, claims Yorkshire MP

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HOUSEHOLDS are overpaying energy firms an average of £1.7bn a year, a long-awaited review of the market claims - leading to a package of recommendations which could see four million families save on their bills.

But one Yorkshire MP has criticised the Competition and Markets Authority (CMA), who held a two-year inquiry into the energy market, claiming it has “ducked its responsibility” by failing to protect the majority of customers.

Former minister Caroline Flint MP who sits on the Public Accounts Committee. Picture: Laura Lean/PA Wire

Former minister Caroline Flint MP who sits on the Public Accounts Committee. Picture: Laura Lean/PA Wire

In its report, the CMA said it wants to set a temporary price cap for low income and vulnerable customers who have pre-payment meters, and plans to launch an Ofgem-controlled database allowing rival suppliers to offer new tariffs to those stuck on standard variable tariffs (SVTs) for three years or more.

This move alone has drawn criticism from those who believe it could lead to a surge in mail arriving through customers’ letter boxes persuading them to switch.

The CMA said too many households - 70 per cent of Big Six customers - were still on more expensive SVTs and could save more than £300 on average a year by switching.

Roger Witcomb, chairman of the CMA’s energy market investigation, said the report sets out a range of “bold, innovative” measures to improve competition in the energy market.

But Labour’s Doncaster MP Caroline Flint, who was the Shadow Energy and Climate Change Secretary, when the inquiry was initiated by the Prime Minister, said the CMA had ducked its responsibility to customers by failing to tackle the issue of the lack of competition in the energy market, and only taking “small steps” to protect pre-payment customers.

She said: “The CMA found that over third of customers would never even considering switching. That reflects a lack of trust in energy companies altogether, which has allowed energy companies to overcharge customers who are going nowhere. The CMA could have introduced a default tariff to cut the bills of the majority of customers.

“Their own report shows consistent overcharging of between 10 and 18 per cent across all energy types and methods of payment. Yet the CMA still failed to grasp that nettle and ensure that this market delivers fair prices.”

Her stance echoed that of Shadow Energy Secretary Lisa Nandy, who said the industry needed to “go much further” to make sure bills were fair and transparent for everyone.

While Energy and Climate Change Secretary Amber Rudd insisted the CMA’s proposals were a “wake-up call to the Big Six”, shares in British Gas owner Centrica rose after the report was released. It said the “majority” of proposals would benefit its customers.

Smaller independent providers broadly welcomed the CMA’s proposals, which follow a near two-year investigation into the UK energy market. But Ian McCaig, chief executive of First Utility, cautioned over database sharing.

“It is vital that this is properly governed to avoid customers being bombarded with information from more than 30 suppliers, which could further damage trust,” he said.

Richard Lloyd, executive director at consumer group Which?, said there was still a “long way to go” in making the energy market fair and competitive.

The report comes as housebuilder Barratt Homes revealed that despite spending an average of £914 on heating bills a year, 71 per cent of adults still feel cold in their homes.