Speaking to parliament in his annual energy statement today, he said that reducing the time it takes to switch energy companies would boost competition amongst the market.
He said that currently the average time it takes to switch companies is 5 weeks, he wants to reduce it to 1 week..and then go further still.
Davey said he would be discussing the way forward with the major energy companies, including SSE, First Utility, Eon, and Scottish Power, on how we could dramatically speed up switching.
He added that “it won’t happen overnight, and the government must be prepared to take action on those companies who drag their heels”.
Davey also reinforced the government’s support for Ofgem’s Retail Market Review reforms, saying they will enable consumers to “compare tariffs more easily and switch more easily to save money”.
He added: “We are promoting collective switching, particularly aiming to ensure the more vulnerable get to benefit from the best deals on the market.”
Competition amongst the market will ensure that consumers get the best deal, and the government wants ensure suppliers “make every effort to return money to customers who have overpaid or switched”The energy secretary also confirmed the annual competition audit, led by Ofgem and the Office of Fair Trading, and a “full report” into the transparency of the financial accounts of the energy companies – both of which will report in the spring.
Caroline Flint, the shadow energy secretary attacked the annual statement, calling it “an annual excuses statement”on the reasons energy bills are increasing.
She also said that the government “gives the energy companies what they want”.
She highlighted that at the Energy and Climate Change select committee on Tuesday, Eon chief executive Tony Cocker asked for a competition commission review into competitiveness in the energy market and now the government is “giving” them this by announcing the annual audit led by Ofgem.
She also criticised the review, saying there has been 17 reviews since 2001 and “what do you expect [Ofgem] to find in the next 10 months they have not found in the last ten years”. Also accusing the governement of only encouraging switching and not reforming the market and saying that “Even the cheapest deal in a rigged market will not be a fair deal.”