MPs oppose CMA remedy: lifting curbs on switching sites could hit new energy suppliers

MPs have written to Greg Clark, the new secretary of state for business, energy and industrial strategy, to urge him not to go ahead with plans to make it easier for switching websites to hide some deals from users. The measure had been recommended by the Competition and Markets Authority (CMA), which said after its investigation into the domestic energy market that switching websites should not be required to show the ‘whole of market’ to users searching for a deal.

MPs on the Select Committee on Energy and Climate Change followed a raft of small suppliers, including GB Energy, Co-Operative Energy and Bulb (subscribers login for interview), in warning that the remedy was anti competitive and could undermine trust in the market. It said small suppliers could not pay as much commission as large suppliers and their offers would be hidden. That would give large suppliers who could pay more an advantage and could reverse the recent shift to a more competitive market.

In a letter to Greg Clark, committee chairman Angus MacNeil cited concerns given in evidence to the committee by consumer groups, as well as small suppliers, and asked the department not to take forward a remedy he described as ‘counterproductive’.

Questioned about the remedy at a recent industry meeting, David Gray, chairman of energy regulator Ofgem, showed little inclination to oppose the CMA’s plan. He said that because switching websites compete with each other, “They have the protection of the marketplace,” so suppliers and switchers could use the ones with lower commission. He added, “If there is a problem with price comparison websites it is unlikely to be just energy”, but he said it was a topic that was being examined by the UK Regulators Network.

Further reading:

Will auto-switch services change the game?

 

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