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Tory price cap: A backward step that could reduce competition and increase inertia

24 April 2017

Gocompare.com comments on the Conservative party’s pledge to cap energy bills.

Tom Lewis from Gocompare.com Energy, said: “A price cap is a backward step, at a time when competition and switching in the energy market are on the rise. Competition and regulator-led reviews of the industry in recent years have consistently pointed to greater consumer engagement and switching as being a force for good and the most effective strategy for households battling to keep their energy bills down.

“As a result, the switching message is getting through to millions of households.  We need to maintain that momentum, encourage more households to take control of their energy bills and carry on switching.

“A price cap could result in some people getting a slightly better deal in the short term, but it could also reduce overall competition in the market in the long term and increase inertia among consumers.  A price cap would pull the rug from under the switching revolution and cast the market back more than a decade.  

“It is estimated that the Tory manifesto price cap pledge could save customers up to £100 a year on their energy bill, however, customers could save as much £300 a year by getting online and switching providers today. The reality is that a price cap would encourage customers to sit back and stick with their existing provider, rather than actively engage with their finances and sniff out bigger savings elsewhere.

“Our message to households is simple. If you’re tired of being ripped off on your energy bills, don’t wait, vote with your feet now, and switch to a better deal today!”

For more information or to compare energy tariffs today, visit Gocompare.com.

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Notes to editors:

*At least 51% of customers who provided their energy usage and received a price for switching energy supplier for both gas and electricity with Gocompare.com saved £305 or more (1st July - 30th September 2016).