Making markets work for consumers - The regulation of gas and electricity sales and marketing: a review of standard licence condition 48

Publication date
19th August 2003
Policy areas

The sale and marketing of gas and electricity are currently regulated through standard licence condition 48 of the gas and electricity supply licences.

This licence condition currently lasts until March 2004. It has been suggested that the licence condition does not provide a satisfactory level of protection for consumers, that it provides uncertainty for suppliers and can be hard to enforce in practice.

This paper seeks to address those views by putting the licence condition in the context of non sectoral consumer protection regulations and legislation, reviewing its terms and beginning a dialogue about potential changes.

The paper recognises that the industry has responded to calls for improvements in the conduct of direct sales and marketing and that there has been a substantial recent reduction in the number of complaints about marketing to energywatch. It also recognises that some suppliers have a much better record than others, attracting proportionately fewer consumer complaints, and that those suppliers could be unreasonably penalised by the introduction of more extensive obligations.

Therefore, the purpose of this paper is not to propose a more obtrusive licence condition, but to consider ways of making it more effective for both consumers and suppliers, with low compliance costs for suppliers whose marketing activities are responsible. The paper discusses a range of suggestions as to how the licence condition might be modified and in particular considers how the licence condition could be directed towards improving specific outputs, in terms of consumer experience, rather than a detailed and prescriptive management of inputs or company practices.

It is hoped that the paper will prompt detailed discussion of the regulation of direct sales and marketing, leading to firm proposals for changes to the licence condition. Views on the issues raised in the document are invited. The closing date for responses is Friday 17 October 2003.

Response documents