This is an interesting contortion the IPPR have managed to get themselves into. That head/rectum pose:
It says that leading companies lure new customers – and those who take the trouble to switch suppliers – with \”loss-leading\” offers that are paid for by stinging longer-term customers with unfairly high tariffs. The IPPR says that the result is that neighbours who use the same amount of energy pay very different sums, while the big companies maintain their position unthreatened by new entrants into the field.
Customers on a \”standard credit account\” (paying in arrears) and who are unlikely to switch tariff or supplier are most likely to be paying over the odds. More than 60% of all households have never switched their energy supplier.
IPPR tested tariffs for British Gas, EDF, E.On, Npower, Scottish Power and SSE for three different payment types, using a price comparison website for properties in London, Sheffield, Dumfries and Aberystwyth. Scottish Power was found to offer the greatest differential between its standard and cheapest tariff: £339 in Sheffield, with London second-highest with £333. The gap at Npower was up to £315 and up to £229 at E.On. British Gas, SSE and EDF had figures of up to £126, £100 and £86 respectively. The thinktank found the difference in the tariffs offered could not be justified solely by the cost of different payment methods.
So there\’s intense comptition in hte market for those new customers, for those willing to switch.
The solution to this is:
will increase the pressure on ministers and the energy regulator, Ofgem, to act to ensure that all customers are offered the cheapest available tariffs.
To remove the comptition!