Martin Lewis hits out at plans to introduce new energy bills ‘penalty’

Martin Lewis has criticised Ofgem proposals to make energy suppliers compensate a customer’s former supplier when they switch, warning that the measure could weaken competition and make cheaper tariffs less attractive. Ofgem says the proposed market stabilisation charge is intended to protect suppliers from sharp falls in wholesale prices and help maintain a resilient market through a volatile winter.

The regulator is consulting on reintroducing the measure, potentially from November; it was previously used from April 2022 to March 2024 after Russia’s invasion of Ukraine. Ofgem says payments would apply only if wholesale prices fell sharply and that reactivation would not automatically increase bills. Lewis argues suppliers are less at risk of collapse than during the earlier energy crisis, and says the charge could reduce the savings available to people who switch.