Chancellor of the Exchequer agreed a new action plan with
regulators this morning to ensure consumers are being treated
fairly and help those struggling to make payments.
As part of the Government’s plan to halve inflation this year,
the Chancellor chaired a roundtable with CEOs from the
Competition and Market Authority (CMA), Financial Conduct
Authority (FCA), Ofcom, Ofgem and Ofwat.
made clear his expectation that
regulators work at pace to guarantee markets are working
properly. With wholesale energy prices and other input costs now
beginning to fall – the Chancellor also wants to ensure
consumers benefit from these reduced costs. During this current
period of high inflation and interest rates, this also includes
ensuring higher interest rates are passed on to savers.
Chancellor of the Exchequer said:
“I am pleased we’ve secured agreement with the
regulators to act urgently in areas where consumers need most
support to ensure they are treated fairly.
“We are working hard to halve inflation this year and
return to the 2 percent target. Businesses must play their part
too and I will keep a watchful eye on the progress they
make.”
The Chancellor also agreed a new action plan with the regulators
to support consumers, particularly the most vulnerable.
FCA have agreed to:
- Deliver better deals for savers by driving competition,
including reporting by the end of July on how the savings market
is supporting savers to benefit from higher interest rates. The
Government fully supports the FCA’s review and the new Consumer
Duty gives them stronger powers to take action if necessary.
- Require the largest banks and building societies as part of
this to explain the pace and extent of their pass through of
interest rates, and how they are proactively supporting savers to
switch to high interest rate products.
CMA have agreed to:
- Deliver a better deal for motorists by publishing their
review of the road fuel market, which examines profit margins in
supermarkets and other fuel retailers, on Monday. This will
include the impacts on vulnerable consumers.
- Help shoppers pay fair prices by bringing forward their
update of competition and unit pricing in the grocery sector to
earlier in July and laying out next steps. This will include
further scrutinising the food supply chain as well as measures to
make it easier for consumers to make the best choices.
- Following affordability pressures in the housing market,
provide an update on their housebuilding market study and work in
the rented accommodation sector in August.
- Actively scrutinise markets where cost-of-living pressures
are growing and launch work in at least two new areas the CMA
considers in need of further investigation. It will also update
on key developments in its ongoing crackdown on misleading
consumer practices.
Ofcom have agreed to:
- Take action to push suppliers who have yet to introduce
social tariffs (discount deals for vulnerable customers) to offer
them in the broadband and mobile markets, as well as waive
fees for any customers who want to switch providers to access a
social tariff.
- Push suppliers to take immediate steps to raise awareness of
existing social tariffs and drive consumer take-up. Ofcom will
work with government and other relevant bodies to support
industry efforts.
- Publish a report on its current review of in-contract prices
to ensure consumers are sufficiently aware of what they are
signing up to by the end of the year. This will consider whether
Ofcom’s rules need to be strengthened. Ofcom will also publish an
update on its full range of work to support consumers in
July.
Ofwat have agreed to:
- Crack down on water companies not going far enough to support
customers to pay their bills, access help and repay debts. This
will include assessing water company compliance with Ofwat’s
Paying Fair Guidelines, and where companies’ approaches are found
to be insufficient, setting out clear actions for improvement in
July. Next year, Ofwat will also set out clear and binding
license conditions for every water company on how to treat their
customers, including customers in vulnerable
circumstances.
- Hold water companies to account over delivering existing
social tariffs for those unable to pay water bills, as well as
allowing consumers to apply for payment holidays and offering
support to those on low-incomes.
- Ensure targeted support for vulnerable customers by improving
data sharing, such as those struggling with bills (along with
Ofgem).
Ofgem have agreed to:
- Ensure all suppliers are passing falling prices onto
consumers, keeping the price cap formula under review to ensure
that it mirrors the costs facing suppliers. The new lower cap
from 1 July will reduce a typical annual household energy bill by
£426.
- Strengthen protections and support for the vulnerable by
mandating the Code of Practice on prepayment meters and ensuring
that suppliers are able to offer Additional Support Credit (ASC)
to PPM customers in need. Both are subject to Ofgem consultations
launched today.
- Take action against suppliers that have over-charged business
customers and publish its review of the non-domestic market this
Summer.
- Scrutinise supplier finances as the sector begins to
move from loss making back into profit. The regulator and
government moved quickly to stem losses and protect consumers
when prices were rising sharply and expects suppliers to act
responsibly and in the interests of their customers as prices
fall and profits return. This includes ensuring they deliver good
service standards and support the most vulnerable customers.
Those who are not yet meeting new capital requirements should
retain profits rather than pay out dividends.
Regulators agreed to provide regular updates to the Treasury on
their progress and that a follow up meeting would be held later
this Summer. The FCA, Ofcom, Ofwat and Ofgem will also publish a
joint statement to set shared expectations on treatment of
customers in financial difficulties.
As part of wider discussions with the Governor in the context of
high food inflation, the Bank of England will finalise their
‘Plan of Action’ on the food supply chain and margins - with
further detail set out in August.
The meeting with regulators on what more they can do to support
people through a period of high inflation comes while the
government continues with its plan to halve inflation this year
and support the Bank of England in taking difficult decisions to
return to the 2 per cent target.
Commitments from regulators to make sure consumers are not being
exploited build on one of the largest cost-of-living support
packages in Europe which has been rolled out to help the most
vulnerable, worth £3,300 per household on average over this year
and last. This includes paying half of a typical household
energy, direct cost of living payments to the most vulnerable and
increases to benefits, state pensions and the National Living
Wage of around 10 per cent.
NOTES TO EDITORS
The CEOs attending were:
- Ofcom [telecommunications] – Dame
- Ofgem [energy] –
- Ofwat [water] –
- Competition and Market Authority (CMA) [competition/consumer]
– Sarah Cardell
- Financial Conduct Authority (FCA) [financial services] –
