Business and Energy Secretary aims to tackle ‘unfair practices’ in energy sector

By : Chris Tipping |July 24, 2017 |Energy, Energy Blog |0 Comment


Business and Energy Secretary Greg Clark is attempting to steer the energy market away from what he describes as ‘unfair practices’, which target vulnerable customers and hinder the development of micro businesses.

Mr Clark has sought the advice of the Chief Executive of the regulatory organisation Ofgem in order to end standard variable tariffs, which are particularly poor value for customers.

Government Abandons Pledge to Cap Energy Prices

It has been noted that the recent Conservative Party manifesto included a pledge to cap energy prices which would have reduced the amount consumers pay on their bills. Some consumers grew concerned though when this pledge was not mentioned in the Queen’s Speech following the Conservative’s narrow election victory.

Instead of the promised cap on energy prices, it seems the government intends to simply use the price protection that is already in place for the most vulnerable customers and extend it to cover more consumers who use energy with the poorest value tariffs.

How Ofgem Works

Ofgem stands for the Office of Gas and Electricity Markets, which itself supports the Gas and Electricity Markets Authority (GEMA). It is a government regulator for the electricity and downstream natural gas markets throughout Britain. Ofgem uses extensive consumer research to ensure both their and the government’s decision-making is not only informed by clear evidence but also by the opinions of the British people who are the country’s primary energy consumers.

Dermot Nolan is Ofgem’s Chief Executive and he will be directly advising the government’s Business and Energy Secretary about how to quickly remove poor value standard variable tariffs that retail energy customers have been complaining about for some time.

Safeguarding Customers and Businesses

Mr Clark’s request for advice began, “Ofgem has powers available that would allow it to address the problems in the market that we now see. I am writing to you as the independent regulator, to ask you to advise me on what action you intend to take in three respects…”

The three areas that Mr Clark identified as needing to  be addressed were as follows:

  • Safeguarding customers on the poorest value tariffs.
  • Ensuring that micro businesses are fairly treated.
  • The future of standard variable tariffs.

“I understand that you may be required to consult formally on any proposed changes to licence conditions,” continued Mr Clark.  “I would be surprised and disappointed if the major energy companies did not acknowledge the need for such changes and be supportive of them and for them to be made quickly so there is common treatment across the industry.”

Ofgem released a statement in reply, saying “We share the government’s concern that the energy market needs to work better for all consumers and that energy companies need to do more to help loyal consumers get a better deal.

“We have received the Secretary of State’s letter. We will shortly be setting out the work we have under way and further options we can explore in the light of the government’s plans.”

For more information about the best value tariffs for individuals and for businesses, get in touch with Business Save’s team of highly experienced energy experts.


About Chris Tipping

Chris has been working with Business Save helping promote and grow their website presence.

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