CMA final report: the industry reacts

The Competition and Markets Authority (CMA) has published its final report after a two-year probe into the energy market set to shake up competition and increase consumer engagement. The remedies have received a mixed reaction.

The remedies include forced data sharing via an Ofgem-controlled database for suppliers to target marketing at disengaged customers and a temporary price control for prepayment customers. The removal of the confidence code for price comparison sites remedy will go ahead, despite a recent survey suggesting that the majority of MPs do not support the move.

Dermot Nolan, chief executive, Ofgem

“The CMA’s remedies, combined with smart meters and faster switching, clear the way to secure a new and better deal for all consumers, especially the vulnerable.

“Ofgem urges the industry to get behind the entire package of remedies and to work with us to deliver an energy market that works for both active and disengaged customers as quickly and effectively as possible.” 

Alex Neill, director of policy and campaigns, Which?

“Today’s report confirms what we have always known – that the energy market just simply isn’t working for consumers. With the cost to consumers of an uncompetitive market standing at £1.4 billion, it’s ​high ​time for energy companies to ​accept they need to change.

“​After a two-year investigation, we need to see swift action by suppliers and O​fgem ​to ​​set out how they will implement the review’s recommendations. ​If the energy companies fail to show they can treat their customers fairly, and deliver better service and ​competitive prices, the regulator must be ready to ​come down on them like a ton of bricks.”

Doug Stewart, chief executive, Green Energy

“The CMA investigation has been a waste of taxpayers’ money and is unlikely to re-establish consumer trust in the energy industry. Instead the constant too-ing and fro-ing of the CMA consultation and their suggestions have possibly led to more mistrust in the energy sector.

“The CMA’s view that consumers could save £300 just doesn’t add up.

“The CMA, Ofgem and the government can re-arrange the deck chairs until the cows come home but customer’s attitudes won’t change as a result. We have a competitive market, with over 40 energy suppliers, and the big six are losing market share. The challenge is for suppliers’ to meet customers’ fundamental expectations and continue the growth of the competitive market already well underway.”

(Struggling to find CMA exciting. Not only is content not new, but even most of the paragraphs aren’t. Even I don’t copy & paste that much.)

— William Marchant (@richonlyinname) June 24, 2016

Lewis Shand Smith, chief ombudsman, Ombudsman Services

“After two years of investigation today’s announcements on remedies are a small victory for consumers and mark an important step to make the market fairer for all, particularly the most vulnerable. Key trends we see from our complaint data are consumer confusion around billing and switching supplier and we are pleased that the CMA is addressing these issues with new measures and action. 

“We will continue to work closely with suppliers, the regulator and Citizen’s Advice to ensure consumers get the best deal from their energy provision and that they know where to go if they have a complaint about the service they receive. All consumers deserve the right to redress if they receive poor service.”

Angus MacNeil, chair, Energy and Climate Change Select Committee

“They’re being quite tepid about it. There are many areas where we [ECCC] will want to raise questions.”

Darren Braham, founder and chief financial officer, First Utility 

“The CMA has completely missed the mark, having spent two years debating how to fix the industry.

“With the remedies proposed, we are in real danger of being back where we started 10 years ago. This means a baffling array of tariffs, even more exploitation by the big six and customers continuing to pay much more than they need to.

“We urge Ofgem and DECC to consider the timing and implementation of certain remedies to avoid a wild west, free-for-all energy market, which won’t operate in the best interests of the vast majority of consumers.”

“Timing is of the essence and, as it stands, the remedies and associated timescales are a big miss that could cause mass consumer disengagement and irreparable mistrust.”

Alistair Phillips-Davies, chief executive, SSE

“After two years of thorough scrutiny of what is an ever-changing and dynamic GB energy market, the end product is a substantial package of reforms that will help deliver meaningful improvements for customers.

“It is a tough set of measures but we recognise where it will help drive the energy market forward to better deliver for customers. We’ve come a long way since the investigation commenced in 2014 and we will continue to engage constructively as we undertake the substantial implementation work in the months ahead.”

So it looks like the final CMA energy market proposals are much the same as provisional remedies… or have I missed something? #CMAbants

— Richard Howard (@RichardHowardPX) June 24, 2016

Richard Neudegg, head of regulation, Uswitch

“It’s taken two years to get here, so it’s vital that no time is wasted putting these remedies into action. Customers shouldn’t have to endure another winter of rationing their heating just to make ends meet.

“The introduction of a temporary prepayment safeguard price control will help some of the most vulnerable, but a well-functioning, competitive prepayment market should be the ultimate aim. Many low income families, elderly and disabled people pay for their energy by other methods, however, and so the Government must increase funding for the Warm Home Discount scheme, and extend it to include all energy suppliers, to help more of those in need.”

Luke Watson, managing director, GB Energy Supply

“The CMA’s decision to remove the whole of market requirement is completely illogical and totally at odds with government policy to promote competition and encourage switching. The CMA is essentially giving comparison sites carte blanche to seek out profits rather than the best energy deals for people.

“The arrival of challenger energy companies over recent years has played a central role in opening up consumer choice and bringing down prices. This decision swings the market back in favour of the big six energy companies while hurting households up and down the country. Along with other challenger suppliers we are urging government to consider this impact fully before rubber stamping the reforms.”

Phil Livermore, chief executive, Ebico

“The CMA investigation has been a complete waste of time and public money. Our FOI request shows it cost £5 million –  a huge cost to the public purse when there is very little to show for it.

“Any meaningful proposals have been watered down following pressure from the big six and the energy market has simply moved on in the time it’s taken to publish the recommendations.” 

Andrew Beasley, managing director, Flow Energy

“More customers switching can only be a good thing for smaller energy suppliers. While the CMA has focused on the ability of price comparison sites to encourage customers to switch to find value, it should not be forgotten that it is actually challenger suppliers, such as Flow Energy, that are already providing value for customers.”

Norman Kerr, director, Energy Action Scotland

“The move to support prepayment meter customers has the potential to benefit those who are on some of the least competitive and generally more expensive tariffs and so we welcome this. However the potential for the creation of a spammers mailing list by the introduction of the disengaged customer database could have a negative effect turning customers away from all competition.”