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UTILITY WEEK | 26TH MAY - 1ST JUNE 2015 | 23 Sponsored report Opinion "This should not be a one-sided affair. Industry too must play its part." W ith speculation about future government intervention and price caps rife in the run-up to the general election, the broken energy market is something that is never out of the news. Aer the competition regulator's lengthy investigation high- lighted the problems consum- ers face in this market, it's no surprise that trust remains low. Two-thirds (66 per cent) of people that we spoke to told us they are worried about energy prices – that's more than at the same time last year (61 per cent). Consumers' trust in the sector is also diminishing with more than a third (36 per cent) of people saying they simply do not trust energy companies, compared with a lower figure (32 per cent) last year. This disconnect between energy companies and their customers is further underlined when we see reports in the media of suppliers bumping up their prices – oen hitting the most hard-pressed families. People whose fixed deals are coming to an end this month and next could be faced with inflation-busting price hikes of up to £400 a year for dual fuel if they don't shop around and switch. Ofgem is trialling ways to reach disengaged customers to encourage them to switch suppliers, but there is more that energy companies could do it the meantime. Just over half (51 per cent) of people told us energy prices remain a concern for them and their families and that they must be a top priority for the next government. Which? wants to see a clear position on energy market competition, with the next government making sure that any intervention in the market is tested, does not lead to price reductions overnight but higher prices longer-term, does not stifle innovation or remove the incentives for providers to improve. Any intervention in the energy market must be time limited. But this should not be a one-sided affair. Industry too must play its part. Smart meters can be beneficial in engaging customers with their energy use, but the roll out of SMETS2 smart meters has already been delayed a number of times. With some suppliers not yet rolling them out at all, the 2020 deadline looks under threat. If the rollout is delayed, there's a danger that much- needed innovation will remain in the distance, further harming trust in the industry. Energy pro- viders must now take the lead and help bring about change that can have an immediate and beneficial impact on consumers. Which? will continue to cam- paign for fairer energy prices and press for a competitive energy market that works for everyone. We will be keeping a watchful eye on energy compa- nies and the next government's plans for improving the market. By working with the industry, government and the regulator, we'll be pushing to ensure trust is restored and the market is a truly competitive one that works for the benefit of all consumers. Alex Neill, managing director of home products and services, Which? A former senior Conservative MP told Util- ity Week the main aim of the cap is not to provide immediate billing relief to customers but to allow for reforms of the market and for suppliers to drastically improve their cus- tomer service, "kick-starting competition" once the temporary cap has been lied. Labour is planning deeper intervention in the market, should leader Jeremy Corbyn triumph on 8 June. There are plans to intro- duce a £1,000 "emergency price cap" along- side wider reforms such as renationalising water companies, transmission and distribu- tion companies and developing state-owned regional energy suppliers. Former energy secretary and Lib Dem candidate Ed Davey slammed the plans for intervention as "nonsense" and anti-com- petitive, adding that a cap would see prices being pushed up. He says the best solution is to continue to develop the competitive energy retail market, which now features more than 50 suppliers, and that this will see customer service levels increase and prices fall in the long run. The industry has largely come out against the proposed price caps. Scottish Power chief corporate office Keith Anderson calls the move "the wrong answer"; SSE called on the next government to follow the CMA rem- edies and not act on "superficial analysis"; while Centrica said the move would lead to "reduced competition and choice, and potentially higher average prices". One senior figure at a major energy sup- plier told Utility Week a price cap would be introduced just as competition and innova- tion in the market is beginning to take off, and it would "set the sector back at least five years". But not all suppliers are fearful of govern- ment intervention. Peter Haigh, chief execu- tive of Bristol Energy, told Utility Week that in the build up to the election with energy grab- bing the headlines, "that actually encour- ages people to switch as it's front of mind". As for the potential of the cap, he says that his business is "well placed" to ride out any interventions. Ovo Energy has been a vocal supporter of the proposed intervention by the two big political parties, saying it will offer custom- ers a "safety net". Founder and chief execu- tive Stephen Fitzpatrick said: "The standard variable tariff cap will not harm consumers or competition, but will act as a catalyst for innovation and efficiency among suppliers." What the price cap won't do is help rebuild the relationship between the energy industry and its customers. For that, more complex, thoughtful, and long-term solu- tions will be required. The percentage of the average bill that goes to finance environmental and social initiatives has increased from 4 per cent in 2010/11 to 11 per cent by 2016/17. Produced in association with: