“Theresa May must not ditch the price cap. The Tories should be on the side of working families, not big business. The only people who will be happy if she ditches the cap are the Big Six. After years of exploitation in the energy market, people deserve the protection of a price cap.”
There are reports that Theresa May will drop her manifesto commitment to introduce a price cap. She must not. Will Hodson, co-founder of consumer collective the Big Deal, said:
“Theresa May committed to a price cap in her manifesto. It’s a policy widely supported by the public and is also backed by the Labour Party.
Ditching the cap would put the Tories on the side of big business and be a kick in the teeth for working families.
The only people who will be happy if she drops the cap are the Big Six who will carry on exploiting millions of customers to boost their profits.
Evidence from Citizens Advice shows that a price cap will not undermine competition or switching rates. After years of exploitation in the energy market, people deserve the protection of a price cap.
Theresa May must not ditch a policy that unites Britain.”
For further information contact Henry de Zoete at firstname.lastname@example.org / 07970323112 or Edward Molyneux at email@example.com / 07970061562.
NOTES TO EDITORS
CMA found that the average family with a Big Six supplier was overpaying by £200 to £300 on their energy bills
HOW THE BIG SIX ARE CASHING IN
|Supplier||No of residential accounts (No of households)||Profit (parent company profit in brackets)||Percentage of customers on priciest “standard” tariff which is £200 to £300 more expensive than their cheapest|
|E.on||7.3m (4.6m)||£267m (£5.4bn)||75%|
|EDF||5.3m (3.4m)||£664m (£900m)||58%|
|British Gas||14.1m (8m)||£574m (£1.46bn)||70%|
|nPower||5.1m (3m)||£67m** (£3.4bn)||65%|
|Scottish Power||5.2m (3.2m)||£583m
** Profits for first half of year
The evidence shows competition will not be affected – switching rates lower now than when energy price caps were in place around the turn of the century
Citizens Advice states:
“The evidence does not show a clear link between switching rates in the energy market and the savings you can make from switching. In fact, as the chart below shows, switching rates in Britain seem to be lower now than when energy price caps were in place around the turn of the century. And switching rates have fallen in recent years even as the savings from switching have risen.” https://wearecitizensadvice.org.uk/capping-energy-bills-wont-kill-competition-9b55dd8213d7
“The chart makes a simple point: switching rates were the same or even higher when energy prices were subject to caps. Both British Gas, as the former national gas monopoly, and the former regional monopoly electricity boards, were subject to price regulation that restricted how much they could charge their customers. The cap on electricity direct debit prices was removed in April 2000, with the other price caps removed in April 2002. Yet at the time, around 300,000 and 400,000 people were switching gas and electricity each month respectively, compared to around 280,000 and 370,000 now.” (https://wearecitizensadvice.org.uk/power-to-the-people-cutting-energy-prices-ce399cd05ff)
There’s price regulation in Northern Ireland and switching rates are the same as in Britain
Citizens Advice states:
“In one part of the UK, energy prices are still regulated – Northern Ireland. The largest electricity supplier there, Power NI, has a ~60% share of the market. Because of this dominance, its prices and profits are regulated. But price regulation doesn’t appear to be dampening consumers willingness to shop around. In 2016 the electricity switching rates in Northern Ireland and Great Britain were identical, both at 15.8%.”
Writing in the Sun today (26 April 2017), co-founder of The Big Deal Will Hodson said: https://www.thesun.co.uk/news/opinion/3414457/greedy-big-six-energy-firms-must-be-hit-with-price-cap-to-stop-them-putting-profits-before-people/
About The Big Deal
TheBigDeal.com is a consumer collective focused on reducing people’s energy bills. We bring together tens of thousands of consumers and use our collective buying power to create exclusive deals.
Launched in March 2014, we now have over 300,000 members and continue to grow. 62% of our members have never or hardly ever switched before – these are the very people who have been let down by the energy market for too long. Moreover, 60% of our members are over the age of 55 and 30% over the age of 65. We have saved the British public over £15 million since we launched.
TheBigDeal.com is a start-up business and charges a commission to energy companies. Unlike price comparison websites we are 100% transparent and publish the exact amount of our commission. For our most recent switch, it was £50 for a dual fuel (both gas and electricity) switch. This compares to £60 to £100 for the main price comparison websites.