Leader: CMA’s provisional remedies lack bite

Cast your mind back two years, when energy suppliers were ­calling for a Competition and Markets Authority (CMA) investigation to “clear the air”, in the wake of Ed Miliband’s price freeze pledge and continued rises in bills. When the CMA investigation began, ­everything was in play, from price controls to a forced break-up of the vertically integrated big six.

The world today is a very different place. The Conservative ­government, without a coalition partner to appease, has returned to its free market roots – just witness its push for domestic competition in the water sector. Miliband’s price freeze promise is as forgotten as he is, and bills – gas bills at least – are now falling in response to historic lows in the wholesale price. Moreover, and perhaps more importantly, the market has changed in response not to ­political forces but to economic ones. Competition has flourished with twice as many independent suppliers today as two years ago, and double the rate of switching. The once all-powerful energy ­behemoths, meanwhile, are on their knees, forced to radically alter their ­business structures as they haemorrhage money.

So what’s a competition watchdog to do? On the one hand, the CMA had to prove its mettle, appease the tabloids and be seen to do something. On the other, it had to recognise the changed economic and political landscape. The shonky compromise it has come up with satisfies no-one – not even its own panel, one of whom (Martin Cave) refused to sign off on the findings.

There are two main headlines to the CMA’s provisional ­remedies: the price cap for prepayment meter customers and the data sharing. The assumption that prepay and vulnerable customers are one and the same seems condescending at best, ignorant at worst. There are questions over the implementation of the price cap, the value of partial price regulation for a self-selecting group of customers, and the £50 headroom with which it will be set. The data-­sharing solution, meanwhile, has already provoked widespread concern that customers (including vulnerable customers) will be bombarded with junk mail as suppliers encourage them to switch.

More satisfactory is its repeated promise to end the four-tariff rule. This at least will allow suppliers to return innovative and bespoke tariffs to the market. As for the rest of the remedies, sound and fury signify little.