Consumer Scotland has published its response to Ofgem's statutory consultation on the future of the ban on acquisition-only tariffs (BAT), opposing the regulator's minded-to position to remove the ban from 1 October 2024. The response was first published on 8 July 20241.
The BAT was introduced by Ofgem in April 2022 to complement the Market Stabilisation Charge (MSC) in protecting consumers during the wholesale price crisis1. Ofgem's consultation states that there was considered to be a residual risk in removing the MSC and the BAT at the same time, hence the February 2024 decision to extend the BAT for a further year1. Consumer Scotland notes that the MSC only expired on 31 March 2024, and argues there has not yet been sufficient time to assess the impact of its removal on market conditions1.
"The proposal to bring forward the BAT removal by six months to 1 October 2024, before the impact of the MSC removal can be can fully understood, and to coincide with the projected increase in prices, is therefore not one that we can support."
Consumer Scotland states it does not agree that the BAT should be removed at this time, and that it should be retained for the foreseeable future1. It identifies access, choice and fairness as particularly relevant to the proposal, and says loyal customers should be able to access the same products and services from their supplier as new customers1. It accepts that Ofgem's new common minimum capital requirement from April 2025 should provide some protection against unsustainable pricing and risk taking, but describes removing the BAT as a regressive step1.
The response also raises the position of households in debt. Consumer Scotland says the BAT ensures customers in debt, who may not be able to switch supplier, can access a better deal with their existing supplier, and that this is particularly true for households paying by direct debit or standard credit, as they are not protected by the Debt Assignment Protocol1. It notes that the previous proposal to extend the BAT beyond 31 March 2024 was supported by all suppliers1. It adds that falls in the price cap for the typical household over the last two review periods have been a welcome reprieve for consumers, but with prices projected to rise again this winter, it would caution against any premature removal of consumer protections1.
Why it matters for households
The BAT prevents suppliers from offering their cheapest deals only to new customers, so a household that stays with its existing supplier can still access the same tariffs as a switcher. If the ban is removed, the loyalty penalty that the BAT was designed to address could return, and households that cannot switch, including those in debt or on direct debit and standard credit, would have less protection1. For a home's energy independence, the practical effect is on what a household pays for the energy it uses, and on whether staying put carries a price penalty. Consumer Scotland frames the question as one of best value rather than cheapest value, arguing that competition should be driven by a wider range of factors than price alone1.
What happens next
Ofgem's minded-to position is to remove the BAT from 1 October 20241. Consumer Scotland's response is one submission to that statutory consultation; the outcome has not been reported. Ofgem's new common minimum capital requirement is due from April 20251.