LETTER: Simplifying energy prices
The government's proposal to cap energy charges whilst, no doubt, gaining approval from Jeremy Corbyn and Raul Castro, will, as is so often the case with government initiatives, not only alienate a section of the population, in this case the suppliers, but will fail to address the problem.
The reason that so many people fail to switch energy supplier is that the labyrinthine tariffs devised by the suppliers, which have been deliberately designed to obscure the true costs of energy, make it nigh on impossible to work out which deal is the cheapest.
I would suggest that the solution to this is quite simple.
Firstly, standing charges should be prohibited. These charges serve only to make price comparisons more difficult and increase energy costs for more frugal users. There is absolutely no justification for this and the energy companies are almost alone in charging their customers even when no product has been delivered.
Secondly, energy companies should be required to publish a headline price for 1 kWh of electricity, and one therm of gas, with a second price or percentage discount for dual fuel customers.
This requirement should apply equally to variable and fixed rate offers.
It would then be perfectly straightforward for consumers to look at these figures from various suppliers and it would be quite obvious which was the cheapest.
This simple and efficient method works perfectly well when assessing the best place to buy a tin of Heinz baked beans and will work equally well for energy.
If suppliers were obliged to publish a unit cost for the product there would be nothing to be gained by devising complex and impenetrable tariffs.