BEIS COMMITTEE REPORT - ENERGY MARKET

fergie_

I knew the cap would be bad from day 1. Yes, it was good for people who did not switch - be it through naivety, laziness or other reasons outwith their control (for example prepaid meters), but it was always going to distort and kill the market. People on the SVR were generally happy to stay there. These were people who previously paid higher rates to 'subsidise' those that were willing and able to switch and shop about. Without the cap, companies would have continued to offer cheaper fixed rate switches as 'loss leaders' and at the same time up their standard customer rates. If this had been allowed to continue to happen, few if any suppliers would have gone bust and the Standing Charge would not have been hammered to try and cover all those costs.

To put it in perspective, its like only ever shopping in 1 super market and then realising what happens when every other chain goes to the wall.