Martin Lewis says Ofgem's 'long overdue' energy update is 'better late than never'

Martin Lewis has welcomed Ofgem's "long overdue" announcement today regarding a consultation to potentially end the ban on acquisition-only energy tariffs this October. Currently, this ban stops energy suppliers from offering deals exclusively to new customers, but Ofgem believes lifting it could boost competition and lower prices in the retail energy market.

The founder of MoneySavingExpert.com expressed his support for the initiative this morning, highlighting the need for measures to invigorate competition and reduce energy costs for consumers. He criticized the current state of the UK's energy market, describing it as "broken" and uncompetitive, which discourages firms from vying for customers and limits savings from tariff switches.

Lewis remarked: "In March, I was staggered when Ofgem told me 'there is evidence that removing the acquisition-only tariff ban would benefit consumers', but didn't remove it 'in case it was moving too quickly.' I disagreed and said we should throw the kitchen sink at getting people cheaper deals. So, this is better late than never."

Martin expressed that under "normal times" he wouldn't advocate for energy companies to offer new customers lower rates than existing ones, but emphasized that "yet these aren't normal times". He elaborated: "The current UK retail energy system was built on the premise that firms would fight each other for customers and compete on price yet that's hardly happening."

"Most firms are currently happy to sit on their existing customers and profit - where once you could switch and save 30%, now it's a few percent at most. So, in reality, the Energy Price Cap, set up as a remedial backstop rate, is now pretty much the Price.", reports the Mirror.

On the MSE website, Martin described the elimination of the "Market Stabilisation Charge" by Ofgem earlier this year as the "last remaining measure" to stabilize the energy market. The charge had previously required energy suppliers to compensate the former supplier whenever a customer switched, helping to cover costs if wholesale prices fell suddenly and large numbers of customers left.

He pointed out that this charge also discouraged energy companies from offering highly competitive deals, as they incurred a fee with each customer switch.