Select Committee on Public Accounts Minutes of Evidence


APPENDIX 1

Memorandum submitted by energywatch (PAC 2000-01/112)

  energywatch do not believe that the market is yet working effectively. One gas supplier is still highly dominant nationally and PES supply businesses are similarly dominant regionally in electricity. There are very low numbers of prepayment consumers changing supplier and debt blocking is hampering the further development of competition for consumers with debt, many of whom will also be low-income consumers.

  We also disagree with the view that the problems identified by several members of the committee (for example Nigel Griffiths MP) are not evidence of market failure. Mis-selling, erroneous transfers, inaccurate and late final accounts, difficulties in making price comparisons, lack of confidence that the process will be simple are all examples of incremental market failure.

  Consumers need better access to standard pricing information but they also need to understand how pricing comparison literature works. Consumers need to have access to information that allows them to compare the services that are important to them but they also need to be protected by performance standards in the transition from a monopoly to a competitive market. energywatch believes that Ofgem needs to take these into account when considering withdrawal from regulating supply service standards. Consumers should be able to sign contracts that are of a standard format—then they will know whether or not they are signing for a contract or information only.

  energywatch will campaign on each of these and other issues as part and parcel of its work to ensure that the market becomes more effective.

Chief Executive
energywatch

19 March 2001


 
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