31 Oct 2013

Ed Davey targets ’24 hour switching’ for energy customers

Energy Secretary Ed Davey sets out reforms to the energy market which could see consumers able to switch suppliers within 24 hours – and firms face criminal sanctions.

Energy Secretary Ed Davey delivered a series of changes to the energy market, in an attempt by the coalition to seize back momentum from Labour in the row over energy prices.

The package of reforms including the prospect of criminal sanctions, a new probe into firms’ accounts, increasing penalties for market manipulation, and moves to make switching supplier simpler – and achievable within 24 hours instead of the current five weeks.

He said: “The energy industry needs to change to put consumers in control. That means making it easy for people to change supplier to save money, it means regular market assessments to check their behaviour, and it means tougher penalties for market manipulation and putting an end to opaque finances.

Energy companies need to know that any wrongdoing will be uncovered and dealt with. Ed Davey

“We want to push energy companies to make switching quicker and easier – because consumer action can force suppliers to change their ways. Bills are being redesigned through Ofgem’s retail market reforms to give people the information they need to make switching easy – and we are taking direct action through the Big Energy Saving Network to bring first hand help to those vulnerable people who find switching difficult.

Energy prices: review details in fight to please customers. (Getty)

“Energy companies need to know that any wrongdoing will be uncovered and dealt with. That’s why the regulators are going to carry out annual competition reviews, to make sure the energy market is operating properly. We are going to consult on increasing the sanctions for manipulation of the energy markets, so that they carry criminal penalties for the first time.”

The review will focus will be carried out by industry regulator Ofgem, the Competition Commission and the Office of Fair Trading.

Labour – which has pledged a 20-month energy bill freeze if it wins the 2015 general election – has dismissed it, saying it would do nothing to address the immediate issue.

Analysis from FactCheck: Turning the heat up on PM's fuel poverty claims

“How will a review that reports next summer help people to pay their bills this winter?” Labour leader Ed Miliband asked when the issue again dominated Prime Minister’s Questions in the Commons on Wednesday.

Miliband added that the PM had gone from “Rambo to Bambi” in his stance on energy firms.

The new measures come as coalition tensions simmer over so-called “green levies”.

Mr Cameron has vowed to look at scaling back the environmental subsidies, which energy firms blame in part for fast-rising bills for customers.

Deputy Prime Minister Nick Clegg said he would fight any “hasty, ill-thought through change” in Chancellor George Osborne‘s autumn statement in December.