MSE News: David Cameron: law will force energy firms to offer cheapest deals

flyingjock1

Exactly. Would mean that their cheapest tariff would have to a standard one which they could put people onto without consulting them in advance. Therefore goodbye to cheap tariffs if their is such a thing!!!

Consumerist

flyingjock1 wrote: »

. . . As its a contract and has a £50 cancellation fee . . .

And therein lies the problem with energy tariffs.

Banning exit charges would make switching an available option for all consumers at any time. These exit charges are, in my opinion, the major obstacle to any real competition in the current retail energy market.

flyingjock1

Agreed consumerist. Thing is, getting the companies to do away with them. Kicking and screaming im afraid.

Consumerist

flyingjock1 wrote: »

Agreed consumerist. Thing is, getting the companies to do away with them. Kicking and screaming im afraid.

Legislation would do the trick at a single stroke.

flyingjock1

If thats pheasible then great, but could they legislate as to what a commerical company can and cant charge

rogerblack

Great. I forsee as a result of this I'll likely be paying significantly more for my electricity, as no standing charge tariffs will likely dissapear.

Consumerist

flyingjock1 wrote: »

If thats pheasible then great, but could they legislate as to what a commerical company can and cant charge

The problem is not what they charge but the way they lock consumers in to a contract by exit penalties. Removing exit penalties from all tariffs (once any current contracts expire) will still provide a level playing field for all energy companies to compete on price.

michaels

exit penalty - 15-50 quid. Cashback from switching - typically 15-100 quid. Saving from switching often 10% so £100 on a 1k bill - I think most can do the maths.

Reducing the numbr of tariffs is unlikely to reduce the suppliers margins as they will have many fewer competitors tariffs to worry about.

And finally how much of the £200 rise mentioned is as the result of green initiatives like subsidising the fit of the rich?

rogerblack

FIT is a comparatively small amount.
Around a fiver, the last time I calculated it.
Renewable heat incentives have the possibility of adding very considerably to this figure.
I do not have to hand the cost of the various subsidised insulation schemes.

It's barking mad that the various schemes are not linked up.

The warm home discount of 130/year to some qualifying households.
The Green Deal, which will repeat some of the mistakes of FIT (approved contractors, duplication of approvals), and end up limiting householders future options.
The winter fuel payment.
Reduced VAT on fuel.
Renewable heat incentive.
Renewable obligations certificates.
Feed in tariff.
Warm front.
Cold weather payments.
I've probably missed some.

All of these need to be considered as one, and the funding applied to the best effect.
For example, if for example, it was noticed on an application for Warm Front, that an application for a heating system would be eligible for 3K of funding, then consider if it would instead make sense to move the householder out, into paid accomodation, fit 5K of insulation, and never have to pay cold weather payments, or winter fuel payment again, as you've slashed the houses heating cost.
Additional benefit would be gotten by reducing energy use, and hence carbon, leading to effective further savings, as it goes towards meeting the CO2 reduction targets.

pqrdef

Destined to be a meaningless political gimmick I'm afraid.

The "cheapest" tariff will always be designed so the conditions mean you don't want it, or the penalties mean you pay over the odds.

And it won't stop them doing introductory offers, and it won't mean you can have another if you've already had one. So it will still be cheaper to switch, unless of course your "cheap" tariff has a long lock-in with expensive leaving penalties.

After all they've said about competition, the government will look silly when it ends up discouraging switching and encouraging lock-ins. Typical Cameron.