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Ahead of his Westminster Hall debate on energy regulation, Conservative MP John Baron says energy customers need better information to make competition work.
With competition in the energy markets still far from 'perfect', Parliament and the regulator must remain vigilant in protecting and empowering consumers. This is the thought behind my Westminster Hall debate today.
That many customers appear to be paying over the odds for their gas and electricity, either because of price discrimination around payment method or region, or because they simply ought to be on a different tariff, is an ongoing cause for concern.
Energy is not a luxury item and we all lose out if the market fails to deliver the full benefits of liberalisation. But the problem is most serious for the five million or so households in fuel poverty.
Tariff structures are notoriously complex and energy bills are often mind-boggling. Which? has calculated there are 15 basic tariffs for each supplier and this rises to a staggering 4,000 or more across all suppliers when variants, payments methods and special offers are taken into account.
As a result, consumers are confused and this is an obstacle of effective competition: an estimated quarter of those who switch (and half of those switching as a result of doorstep sales) end up paying more.
My 10 Minute Rule Bill in April proposed a simple obligation on the energy suppliers to inform customers of the cheapest tariffs available. For some customers this might be a social tariff whilst, subject to eligibility, while for others it may be a dual-fuel direct debit internet account.
In my view, the domestic energy bill is currently a missed opportunity for conveying this type of information. Consumers are likely to be most receptive to the possibility of switching at precisely the moment when they are most keenly aware of the cost of energy.
Consumer choice and the threat of 'exit' has an important part to play in driving competition and innovation. But that choice must be guided and empowered by information to cut through the confusion about tariffs and ensure that switching, when it happens, truly benefits consumers.
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