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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