Jonathan Jones

A welcome attempt to fix the broken energy market

Text settings

Back in October, Ofgem produced a report exposing the failure of the UK's energy market. It showed that the supplier's profit margin on the average fuel bill had shot up from £15 to £125 in just four months. As I said at the time,

‘This wouldn't be possible in a market that was working correctly. If customers were shopping around for the best deal, suppliers would have to undercut each other – and there's plenty of room for them to reduce prices while still turning a profit (£125 of room, in fact). But Ofgem's figures show this isn't happening.’

Nick Clegg has announced a raft of measures to help customers to make sense of the energy market, find a better deal and hence reduce their bills. Speaking at Canary Wharf today, he said:

‘Right now, seven out of ten customers are on the wrong tariff for their needs, so are paying too much. Yet people rarely switch, despite the fact some families could save up to £100 a year. There are currently over 120 different tariffs, making it very difficult to know where to start. That is going to change. As of this Autumn, your supplier will have to contact you with the best tariff for your needs. And if you call them, they’ll have to offer you the best deal too.’