Ofgem Pledges To 'Simplify Energy Market'

Ofgem has published plans that it says will create a "simpler, clearer and fairer" energy market.

The regulator outlined a range of measures including scrapping confusing tariffs and forcing suppliers to tell consumers the cheapest deal available.

It comes after the Prime Minister took the sector by surprise when he vowed to introduce laws to make energy suppliers give customers the best value tariffs - rather than simply inform consumers what is available, as unveiled by Ofgem.

Energy Minister John Hayes later insisted the Government was only considering introducing such a law.

Ofgem also extended proposals unveiled last year to simplify tariff structures and limit the numbers of different tariffs offered across the whole market.

It proposed that suppliers offer four core tariffs per fuel type - electricity and gas - cutting out the "baffling" array of deals currently on offer.

So-called "dead" tariffs that are no longer available will be banned to reduce the risk of people paying too much, Ofgem said.

It also wants to stop price increases or other changes to fixed-term tariffs, and introduce new ways of helping consumers switch energy accounts.

The watchdog's chief executive, Alistair Buchanan, said the proposals followed input from thousands of consumers.

"Our plans will put an end to consumers being confused by complex tariffs and will usher in a simpler, clearer, fairer and more competitive energy market for all consumers," he said.

"I am glad to say suppliers have already responded with some initiatives, but these don't go far enough. 

"Ofgem is determined to press forward with proposals to deliver for consumers the most far-reaching shakeup of the retail energy market since competition was introduced."

The executive director of consumer group Which?, Richard Lloyd, broadly welcomed the proposals.

"Along with the Prime Minister's promise to ensure suppliers put their customers on their lowest tariffs, this is another big step towards helping people get the best price for their energy," he said.

"Our own research shows the market is far too complicated, with only one in 10 people able to find the cheapest deal.

"These proposals will boost customer power, making it much easier to shop around, and should increase the pressure on the energy companies to keep their prices in check."

The Energy Secretary Ed Davey said he had been pushing for the measures for some time.

"They represent a big step forwards in reforming our energy market to help millions of households get a better deal on their energy bills," he said.

""I want an energy market where the suppliers have to work hard to win your business, and then work hard to keep it."

But the shadow energy and climate change secretary, Caroline Flint, argued that Ofgem's proposals were "only tinkering at the margins".

"It is deeply disappointing that after spending nearly two years putting these proposals together Ofgem has once again ducked the opportunity to get tough with the energy giants," she said.

"We need to open up the books of the energy companies, but these reforms do nothing to improve the transparency of the prices these firms charge their customers."

Ofgem is legally required to go through an extensive consultation process but wants to start to introduce its reforms by summer 2013.

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