Most customers want energy price cap

The survey - carried out by Harris Interactive on behalf of trade publication Utility - found that 51% of energy customers believe bills should be capped, largely because "energy companies can't be trusted not to rip people off."

However, this expression of desire comes at a time when the political mood has changed in Westminster, with the Government and the energy regulator Ofgem now more inclined to support a cap only for "vulnerable" people on SVTs, rather than for all customers as a whole.

As such, it's not likely that a universal SVT cap will be introduced anytime soon, at least not when the political weakness of the Government means that, for fear of losing support, they can't do anything too radical.

Credit: Alex Yeung/Shutterstock.com

Support despite satisfaction

Yet despite the hobbling of the Prime Minister and the Government, it would appear from the survey that support among the general public for an SVT cap is still strong.

Aside from revealing that just over half of all customers think a cap should be implemented, it also found that many customers would also like greater clarity from their energy providers regarding the makeup of their bills.

For example, 49% replied that they would like to see their bills broken down into component parts, so that they can see where exactly their money is going.

However, what was interesting was that, despite a narrow majority supporting a universal SVT cap, a combined total of 74% of respondents believed that they weren't paying an unfair price for their gas and electricity.

What this suggests is that, even though many people aren't being adversely affected by the sometimes excessive expense nature of SVTs, there's nonetheless the recognition that such tariffs can hit some customers very hard.

Source: Ofgem

This would perhaps also explain why, in addition to 51% agreeing with a universal cap, 24% supported a cap on SVTs for "vulnerable" customers.

Vulnerability

While such a segment of the survey's sample were in the minority, they would appear to be more in tune with the prevailing winds in the UK's political establishment.

That's because, after proposing a blanket SVT cap as part of their election manifesto, the DUP-backed Conservative Government have now dropped the policy.

They still vow to introduce some "measures to help tackle unfair practices in the energy market", yet these remain vaguely defined. Also, given that Prime Minister Theresa May is now weaker than she was going into the election, it's unlikely that she possesses the authority necessary to drive through a measure as strong as a cap, which was opposed by certain factions within her own party.

That said, there may be an alternative to a universal cap at hand, because last week Ofgem began looking into the possibility of an SVT for vulnerable customers.

They're referring to it as a "safeguard tariff", and are currently approaching it as an extension of the cap for prepayment energy customers they introduced earlier this year.

And while they haven't yet defined what "vulnerable" means in the context of a possible cap, Citizens Advice have taken things one step further in response to their announcement and suggested that it should refer to anyone in receipt of the Warm Home Discount.

The charity's chief executive, Gillian Guy, said, "capping energy bills for the poorest pensioners and families on standard variable tariffs will help those who have been let down the most by a broken market."

As a result, a partial cap would cover people who were either getting the Guarantee Credit element of Pension Credit, or were on a "low income" or receiving means-tested benefits.

According to Citizens Advice, capping SVTs like this would help as many as 2.6 million people, many of whom have been hit by the wave of price rises introduced by most of the Big Six over this past winter.

An 'option'

Of course, while even a cap restricted to vulnerable customers would be welcome in a climate where the Government's capacity for vigorous action has been restricted, there's still no guarantee that even this will be achieved.

It should be noted that Ofgem currently regard the safeguard tariff as an "option", implying that they could be swayed by various parties (e.g. energy providers) into concluding that it's not a very good idea.

This might be a likely outcome given that, as part of the same review, they're also considering measures aimed at increasing competition and switching, such as "writing to customers - including people who are vulnerable and not online - about cheaper offers from rivals".

And because a similar investigation published last year by the Competition and Markets Authority ended up recommending competition-boosting measures rather than price controls, it's quite conceivable that Ofgem's inquiry will do much the same as well.

And this would ultimately mean that customers would be forced to become savvier about switching provider, or face being hit with consistently overpriced bills.