Competition, With Protection For The Most Vulnerable, Most Be Allowed To Deliver For Consumers

We often hear about the "broken" energy market, yet competition is increasing and it is delivering benefits for consumers.

We often hear about the "broken" energy market, yet competition is increasing and it is delivering benefits for consumers.

In the past two years, we have seen an exponential growth in the number of energy suppliers, doubling from 24 in 2014 to 48 last September.

During this time, around 2 million consumers joined these new entrants and their market share increased by over 10%, to just below 20% today. Collectively they now have a greater market share than Scottish Power, Npower and EDF individually.

This means, when price rises hit the headlines, there has never been a better time to shop around and consumers are increasingly voting with their feet.

We are seeing record numbers switching, with almost 5 million people changing supplier last year, and twice that number making a change with their existing supplier.

And it is not just "savvy switchers" benefiting. Recent research for Utility Week revealed that over a third of those switching last year were "first timers".

Despite all this, the energy industry remains under intense scrutiny and rightly so, as an essential service and a significant part of household costs.

Any debate about prices, needs to start with a discussion about costs. Much of the current rhetoric ignores the facts.

The regulator's own index shows that cost pressures, outside of suppliers' control, have increased and are set to increase further. An honest debate around energy prices must acknowledge these increasing costs.

These costs are essential if we are to replace our infrastructure and invest in a digital, decarbonised future which will bring benefits for consumers and lead to reduced consumption and therefore bills.

So, the Government is faced with two choices...

Allow competition to continue, maintain scrutiny and pressure but allow the remedies from the recent market investigation to be implemented and build on what is the most competitive energy market ever.

A market where innovation, new technology and competition puts consumers in control of their energy use.

Or intervene further, and risk killing off competition - which is delivering results for consumers - and undermine many of the positive changes we are seeing in the retail market.

We must not go backwards but continue to become a market where competition drives innovation and improvements in customer service, and where consumers engage to get the best deal, while important safety nets ensure protection for the most vulnerable.

We know more can done to support vulnerable customers however the solution is not to distort the market as a whole but to improve existing support, including Government schemes like the Warm Home Discount, so they more effectively target those who need it most.

Let's hope the parliamentary debate today gets to the nub of the issue - how to engage effectively with those hard-to-reach consumers and how best to protect the most vulnerable consumers.

We are taking action but we stand ready to work with the regulator, government and consumer groups, to make sure we deliver a market that truly works for all consumers.

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