This publication provides the joint response of Citizens Advice and Citizens Advice Scotland (the 'Citizens Advice Service') to the Competition & Markets Authority's (CMA) energy market investigation consultation on their updated issues statement published on 18 February 2015.
The submission provides detailed comments on each of the theories of harm, as well as an overview of the Citizens Advice Service's views on the CMA's interim findings and the areas where we believe analysis should be further developed.
The Citizens Advice Service believes that the CMA's inquiry needs to deliver in two key areas.
- The first is around public understanding and trust in the sector. The cost drivers behind price movements have been a source of near-constant public dispute for many years now, with the result that the vast majority of consumers, rightly or wrongly, simply no longer believe what energy companies have to say on the issue.
- The second is on the essential nature of the service. Energy is not a luxury, therefore the market must work for all sectors of society. In essential services, there is always a risk that some competitive outcomes may clash with wider public policy objectives.
In both of these areas, there is still much work to be done. The Citizens Advice Service's core recommendations are:
- The inquiry needs to leave behind an enduring, undisputed, framework through which consumers can understand what goes into their bills and whether the profit margins energy companies are making are fair.
- It is imperative that the CMA finds means to get competition working for the most vulnerable consumers. If they cannot, they should consider what alternative means of protection can be provided.