Commenting on British Gas losing 261,000 customers since the start of the year, Ben Wilson from Gocompare.com Energy said;
“It’s hard to read British Gas’ warning as anything other than a thinly veiled threat when issued alongside a back drop of job cuts. However, the fact remains that a price cap could have a potentially devastating effect on the market and hurt millions of households.
“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.
“Ultimately, the big six aren’t losing customers because there’s less of a demand for energy. They’re losing them because smaller providers are regularly providing more competitive deals. “The British public are coming around to the idea that opting for a standard variable tariff from a big provider is a mug’s game. Instead they’re voting with their feet and saving up to £300* a year by switching.
“While a price cap could result in some people getting a slightly better deal in the short term, it could also reduce overall competition in the market in the long term and increase inertia among consumers. The cap would pull the rug from under the switching revolution and cast the market back more than a decade.”
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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).