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Campaign for 'fair' energy prices

A consumer watchdog has launched a campaign calling for "fair" energy prices after a poll found just one in five people trusted suppliers' charging practices.

Which? has called for simpler tariffs alongside a "credible, independent benchmark" or a "price to beat" set by regulator Ofgem against which consumers could compare costs.

The watchdog said its latest poll revealed a "shocking" lack of trust in energy companies, with just 18% of consumers trusting suppliers to charge a fair price for their energy and more than half (54%) saying they found it difficult to compare the cost of different deals.

It also found that just 17% of consumers trusted energy companies to act in their customers' best interest and just a quarter (26%) rated their supplier as good at offering them a fair price.

Which? said energy prices consistently ranked as the primary financial concern for consumers, with four in 10 (41%) worried about the cost of heating their home this winter.

A quarter (26%) said they did not know whether they could afford to heat their home this winter, and just 24% believed that competition between energy companies currently drove down prices for consumers.

Which? has proposed that energy suppliers compete against the "price to beat", which would be regularly updated by Ofgem, but said this would not be a return to full price regulation and could take a number of forms ranging from a reference price to a regulated tariff, adding that similar models already existed in parts of the US and Northern Ireland.

The watchdog's Fair Energy Prices campaign also called on the Competition and Markets Authority (CMA,) which is investigating the energy market, to look into the best way for the regulator to establish a "price to beat", so that consumers could trust that their bills were fair.

It wants the CMA to require suppliers to use simple, directly comparable pricing similar to petrol pump displays to allow consumers to more easily compare prices and make the best choice if they switch.

Which? executive director Richard Lloyd said: "Our research shows that the energy market remains at rock bottom for consumer trust.

"Millions of customers still don't think they're paying a fair price and most people find it hard to compare deals.

"Big reforms are needed to restore confidence in the industry and to guarantee fairer energy prices for consumers.

"The CMA should now investigate how the independent regulator could establish a price people can trust that will spur suppliers to compete and reassure worried consumers that they're not being ripped off.

"Meanwhile, energy companies should use simple pricing to increase confidence in the industry and boost competition by encouraging switching."

:: Populus surveyed 2,106 UK adults online between September 5 and 7.

Energy minister Amber Rudd said: "Which?'s 'petrol pump pricing' proposal is interesting but I am concerned that this could potentially have unintended consequences - particularly on vulnerable high energy users, such as pensioners, and on our new smaller independent energy suppliers.

"I want an energy market that works for consumers first. That is why the Competition and Markets Authority has been asked to undertake the most far-reaching independent inquiry into the market. This will provide an opportunity to rebuild trust in the sector."

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