Advice Direct Scotland comment on Ofgem energy price cap consultation

Glasgow, Scotland – March 26, 2024:

Plans to reform the energy price cap should be backed up with a UK-wide social energy tariff, Advice Direct Scotland has said. 

Regulator Ofgem has announced a consultation on a range of options, including a cap based on consumers’ vulnerability and when energy is used.

Ofgem is also considering more flexible, market-based price protections, such as setting a limit between a supplier’s default tariff and tariffs available on the market.

Advice Direct Scotland, which runs the national energy advice service energyadvice.scot, has welcomed the review, warning that the current cap “is not fit for purpose.”

However, Advice Direct Scotland has stressed the need for further reform with the introduction of a social energy tariff.

Advice Direct Scotland, which has been campaigning for the move, argues that an opt-out scheme – which would automatically put struggling households on the cheapest deal – is the only way to effectively end fuel poverty in the UK.

The policy could be targeted at those most in need, with eligibility being determined by whether members of a household are in receipt of benefits or are on low incomes.

A recent poll showed that there is widespread public support in Scotland for the policy, with two-thirds (66 per cent) of those questioned backing it.

Hazel Knowles, Energy Lead for Advice Direct Scotland, said:

“We welcome this consultation as the current price cap is not fit purpose.

“With the shift towards net zero and an increase in time-of-use tariffs, it’s important that consumers are protected.

“Our experience supporting users of such tariffs, especially in rural areas, reveals significant confusion and disadvantage among consumers. We need to focus on vulnerability and affordability.

“Any change to the price cap must sit alongside other measures, like a social energy tariff.

“Among those who would benefit from such a policy are people with illnesses and disabilities who rely on life-saving electrical equipment to stay alive.

“We are convinced that the best way of fixing the country’s broken energy market is an opt-out system which would automatically put vulnerable people on the cheapest deals.”

NOTES

Ofgem’s announcement can be found here:  Discussion on the future of the price cap.

More information about Advice Direct Scotland’s campaign for a social energy tariff, including resources to support the campaign, can be found here: Energy Social Tariff.

A PDF of Survation Scotland Survey conducted on behalf of Advice Direct Scotland can be downloaded here: Survation Survey: 14th to 20th February, 2024.

News on Advice Direct Scotland’s Social Energy Tariff Campaign can be found here: Advice Direct Scotland launches social energy tariff campaign.

News on the recently conducted poll can be found here: New poll: Three-Quarters of Scots limit energy use amidst concerns over high bills – Advice Direct Scotland.

Advice Direct Scotland is a charity which runs the national advice service advicedirect.scot. Advice is available to everyone in Scotland, at no cost, regardless of personal circumstance.

Advice related to energy issues is available at www.energyadvice.scot and on freephone 0808 196 8660, Monday to Friday, 9am to 5pm.

The website also includes an online knowledge centre for Scots, with information on:

• Billing and meters

• Complaints and disputes

• Grants and assistance

• Scams and fraud

• Loss of energy supply

• Switching suppliers.