Flying Freehold
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New Energy Legislation
The Government is to introduce new legislation to fix a ‘broken’ energy market.
The problem.
The problem is the energy suppliers look to provide excellent rates for new customers for a fixed term, then the tariffs revert to standard variable tariffs, which tend to be less than competitive.
That’s fine for the savvy customer who is ‘on it’ when it comes to searching the market place for the best deals, but not so good for, say my 80-year-old mum, who does not have the internet and isn’t keen on change, or for the many of us who don’t understand the market.
It is an opportunity for the energy suppliers to make money, after all they are a company and do have a duty to shareholders, but is this the right way to do it.
The solution.
The Government has drafted new legislation that will cap what the energy suppliers can charge for those on the standard tariffs, whilst we don’t know what the cap will be, it is estimated to save a customer over £100 per year; it’s unlikely that this will come into force until 2019.
Ironically the announcement by the MP saw shares in the Energy Company’s rise, perhaps because they had been anticipating the worst and it was not that bad, whatever happens I am sure the profitability of energy companies will be fine and whilst some consumers will gain, others will lose.
The move has been criticised by price comparison websites, calling it ‘negligent’. It’s difficult to criticise the move made by the Government as it will benefit those who need it most, whilst it may narrow the difference between ‘deal rates’ and ‘standard rates’ I am sure, even if the commission paid to the price comparison sites has to fall, people will still look to switch and make a saving-however small.
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