Select committee: Industry and Regulators Committee
Recommendation 26
1st Report - The net zero transformation: delivery, regulation and the consumer
Published 4 Mar 2022
Paragraph 211
Industry and Regulators Committee Ofgem and net zero All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
While competition will remain an important feature of the retail energy market, the Government and Ofgem should set out their expectation that companies should compete on their overall service and value to customers and not just on price. The use of switching as a singular metric of competition should be abandoned. It is the ease of switching rather than actual switching which supports competition; high switching may be an adverse measure of customer service rather than something to be encouraged. Indeed, if firms are to help customers manage the energy transformation this may require longer term contractual relationships.
From: Industry and Regulators Committee, 1st Report - The net zero transformation: delivery, regulation and the consumer, paragraph 211, 4 March 2022
Government response
The government responded to the whole report on 27 May 2022 (deadline 25 May 2022).
Summary written by Accountability Index from the government's response. It is not the government's own words.The government sets out actions across the report's themes, declining to target a specific 2050 energy mix and to add a net zero duty for Ofgem, while agreeing with the committee on the retail market and consumer engagement.
- On a roadmap to net zero, it says the exact 2050 technology and energy mix "cannot be known now". It commits to a public update every year from 2022 on progress against the Net Zero Strategy pathway.
- On Ofgem, it says "A new duty is not necessary", stating that the duty to protect consumers' interests already includes reducing emissions in line with net zero. It has committed to consulting on a Strategy and Policy Statement for Ofgem "later this year".
- On a net zero taskforce, it states that "Our current governance arrangements are effective" and describes existing ministerial committees. It is creating a Future System Operator with objectives set out in primary legislation.
- On the energy retail market, it says "We agree with this view" on consumer engagement. It will refresh the retail market strategy, aiming to publish an update "as soon as possible, once the market has stabilised".