Breathing life into the Price Cap, haven’t we been here before?
We’ve talked of strange times before on this blog and in many ways I thought they might soon end, however this doesn’t seem to be the case! When the Prime Minister is not overshadowed by a comedian attempting to pass her a P45, but instead by a range of other storms, you know we’re hitting peak Twilight Zone.
Theresa May covered a lot of ground in her Conservative Conference speech and as ever we’ll avoid political sentiment and instead focus on one key area: the proposed energy price cap. Some history first: the idea of a price cap has come up a number of times over the past few years, with political parties of all colours claiming ownership of the original idea. However, for a variety of reasons it keeps getting kicked into the long grass.
This time that may not be the case. Whilst we’ve got scant detail so far, Mrs May promised details would be published next week in the form of a draft Parliamentary bill. In effect the baton will be firmly passed to OFGEM to make the cap a reality. Whilst its not yet clear, it seems highly likely that a cap would be applicable to any household that is currently on a Standard Variable Tariff. Although it seems a stretch to think it could be implemented this winter.
Our view remains that our politicians are still misdiagnosing the problem at hand and therefore a price cap is probably not the answer to the exam question they’ve been set.
The true challenge that remains is led by apathy – in short a disengaged group of customers who do not understand how to take action or worse still don’t see taking action as a value adding experience.
At the last count domestic energy customers have over seventy energy suppliers to choose from. If we assume each of those offers at least four tariffs, that’s in excess of 240 “products” to choose from. That feels like a dynamic market that provides a good level of customer choice and majors on price led propositions. Therefore a price cap seems like a mighty blunt instrument. Instead all sides involved would be better-placed spending time explaining the benefits of getting involved in the market and getting consumers looking around at the deals available.
Switching Energy remains committed to this goal and we believe that by remaining on your existing legacy tariff, even a cap won’t provide you with the savings that switching now will. To take action now and get out of the Standard Variable Tariff trap, get a comparison and selection of quotes here: https://www.compareprices.switchingenergy.co.uk/