Simplified gas and electricity tariffs to begin by 2014

Regulator Ofgem promises the biggest shakeup of the energy retail market since competition began

All UK households will receive simplified gas and electricity tariffs by the end of the year and must be told the cheapest deal available from their supplier by the spring, industry regulator Ofgem said on Tuesday.

Energy companies must offer no more than four tariffs for each type of fuel in the first stage of a package of reforms, which aim to make the energy market more transparent and simplify pricing.

The reforms, backed by the prime minister, include new standards of conduct – a sign that the regulator is taking more aggressive action against energy companies found to have misled customers. Ofgem said the new guidelines would force suppliers to go through "a culture change" in the way they treat consumers.

David Cameron pledged last year to force energy companies to offer customers their lowest tariffs – a promise the regulator is now trying to deliver.

Ofgem has described the reforms as the biggest shakeup of the energy retail market since competition began. In the first step, new enforceable standards of conduct require suppliers to ensure that every domestic customer is treated fairly. New rules forcing suppliers to put details of their cheapest offers – personalised for individual consumers – on all bills will be introduced by the end of March.

Ofgem's chief executive, Andrew Wright, said the reforms aim to tackle the lack of trust which had "blighted" the energy market following revelations of large-scale mis-selling.

He said: "Suppliers have already taken some steps to make the energy market simpler for customers and we welcome that, but our package of reforms means they must go further. The standards of conduct we have introduced require suppliers to go through a culture change in the way they treat consumers.

"They have to make sure they are embedding simplicity, clarity and fairness into all their dealings with consumers to tackle the lack of trust that has blighted the market. The standards of conduct will also enhance consumer protection as they are backed by Ofgem's power to levy fines."

Ofgem has the power to levy a maximum fine of 10% of a company's annual turnover for breach of conduct although it has never gone up to this ceiling.

Ofgem is working to ensure energy company customers are offered the lowest tariffs.
In May it imposed its biggest fine – £10.5m – on energy company SSE for numerous breaches of the company's obligations relating to telephone, in-store and doorstep sales activities. Ofgem said SSE – which provides gas, electricity, phone and broadband for 9.6m households – had made misleading and inaccurate statements to customers in order to make a sale.

Consumer groups welcomed the reforms but questioned whether they go far enough. The executive director of consumer group Which?, Richard Lloyd, said: "Improving the way suppliers deal with their customers is a step forward but Ofgem's reforms to fix the broken energy market do not go far enough.

"Rising energy bills are consistently one of the top worries for consumers so the government must step in to ensure trust in suppliers is rebuilt and prices are kept in check. We want the government to introduce simple pricing and to ringfence energy supply from generation businesses to increase confidence that there is effective competition in the energy market."

New government figures released this month showed that households in England and Wales cut their energy use by a quarter between 2005 and 2011 as prices soared. The sharp fall was probably caused by a mix of efficiency measures and environmental awareness, as well as steep price rises, the Office for National Statistics (ONS) said.

Households have faced large price increases in recent years at the same time as wages have remained frozen, squeezing budgets. Over the past three years, average bills have risen by 28% to £1,420 a year, Ofgem said.

Energy suppliers insisted that they had already taken steps to simplify tariffs.

Angela Knight, chief executive of the industry body Energy UK, said: "Energy suppliers are ahead of the game in making tariffs simpler and have already made them easier to understand and easier to compare as part of their moves to put the customer first.

"Changes are also well under way in better and clearer communications. Companies are working closely with all the policy makers and the regulator, and most importantly with their customers, as Ofgem knows."

Article Source : http://www.guardian.co.uk

Azure Global’s vision is to be widely recognized as a reputed firm of financial business advisors, achieving real growth for ambitious companies and to become the first choice for F&A outsourcing for accountancy practices and businesses alike and if u want to Setup ur business in United Kingdom then  its not difficult in this modern age for more info visit our site Azure Global and join us also On Facebook