Working people will have better protections in the energy market through a new package of protection measures announced by the Prime Minister today.  

The current system makes it too difficult for consumers to access proper compensation.

Companies have 8 weeks to respond to requests, and if they do not respond or complaints go unresolved, then the onus is on consumers themselves to self-refer to the Energy Ombudsman.

This produces a situation in which consumers often do not access the compensation they are entitled to due to time pressures or fatigue with a complex system.

These reforms will take the pressure off consumers and onto the companies to ensure that consumers get the compensation they deserve. Doing so will ensure energy consumers are better-protected and empowered to take action when necessary.  

These include proposals to make compensation fairer, quicker and easier, and covers areas including:  

• working with Ofgem to look at expanding automatic compensation to cover more key issues faced by consumers, including excessively long call waiting times, unexpectedly high bills when suppliers fail to adjust direct debits, suppliers not responding to complaints, or suppliers not complying with Energy Ombudsman final decisions
• government working with Ofgem to look at further increasing the value of base-level compensation from £40, following the first increase since the payments were last set a decade ago
• strengthening the Energy Ombudsman’s powers so that suppliers must comply with its final decision or pay compensation to the consumer 
• cutting the time before complaints can be escalated to the Ombudsman from 8 to 4 weeks
• making referrals to the Ombudsman automatic, instead of people having to do it themselves

Minister for Energy Consumers Miatta Fahnbulleh said: 

Through our Plan for Change we are delivering an energy market consumers can trust, putting an end to unfair practices, holding suppliers to account, and ensuring that the consumer always comes first.  

Today’s announcement is about taking the next steps – helping households to get fairer, quicker, easier compensation when things go wrong.

This announcement follows confirmation that 2.7 million extra households will receive £150 off their energy bills this winter as the Warm Home Discount is expanded – putting more money directly into people’s pockets. 

This vital support is the latest in a raft of cost of living support made possible because the government has stabilised the economy, fixed the foundations and repaired the public finances – deliberate choices which are helping provide security and more money in the pockets of working families through the Plan for Change.

Since last summer, interest rates have been cut 4 times, lowering mortgage costs, free school meals have been rolled out for over half a million more children so that kids can focus on learning rather than hungry bellies, free breakfast clubs are being expanded to every child in the country, school uniform costs have been cut, and the 30 hours of free childcare scheme has been extended to more working parents.

Work continues on the government’s comprehensive review of Ofgem, focusing on delivering an energy market where the consumer comes first.    

The review is also considering how Ofgem can better drive the government’s missions for clean power and economic growth.  

This includes investigating how the regulator can support the private sector to invest in energy infrastructure, and ensuring that families who want to upgrade their homes with clean technology can do so safe in the knowledge that they are protected by robust and responsive regulation.  

Notes to editors

Formal recommendations following the conclusion of the Ofgem Review Call for Evidence will be published later this year.  

Reforms follow Secretary of State Ed Miliband’s letter to Ofgem Chief Executive Jonathan Brearley in February, in which he demanded that Ofgem took quicker and more effective action on consumer protection issues, including compensation for families affected by the forced installation of pre-payment meters.  

In May Ofgem announced £18.6 million of compensation for the victims of forced pre-payment meter installations, following the Secretary of State’s letter and months of government work with the sector.