Ofgem is the energy market regulator that is supposed to be examining what it is that is going well or badly in the market. But it doesn’t seem to be doing the greatest job. This week we will hear more details about the annual competition test announced by David Cameron at PMQs last week, but the problem is that Ofgem has only just concluded an examination of this anyway. That review of the retail energy market took two years and published a series of rule changes in June 2013. The changes were designed to address ‘widespread consumer confusion over energy tariffs, poor supplier behaviour and lack of transparency which is stifling competition’.
The main difference between the review that has concluded and the new ‘annual competition test’ is that the Office of Fair Trading and the Competition and Markets Authority are also working with Ofgem on the test. And that this new test is an annual one rather than a two-year review.
Does this mean that Ofgem isn’t doing a good enough job if there is still a need for an annual test after such a comprehensive review? The Prime Minister’s spokesman this morning dodged that question, saying:
‘I think what it suggests is that there is as I said, scope to look at other markets, other sectors to see what evidence and ideas may be brought into – provided – from those as we look at how we ensure that there is greater competition in the energy sector.’
He added that the decision to introduce this annual competition showed ‘the widespread concern around energy bills, on the need for more competition in the energy market’. Which sounds oddly like the remit of the Ofgem review, but with other bodies who apparently know a lot more involved as well.Tags: energy market, Ofgem, UK politics