Inertia

According to comparethemarket.com, 59% of Britons have failed to shop around for a better deal over the past two years, which is costing customers up to £235 a year on average.

Concerns about time (10%), confusion (9%) and the worry of being over charged during the switch process (13%) are amongst the greatest fears preventing consumers from changing.

The research revealed that an energy switching guarantee could encourage more than in four (27%) Britons to switch and save.

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On the topic of inertia...is food labelling failing?

Why is this so successful?

Activating Inert Customers is the key

Populus’s Gary Muncaster notes: “Our research suggests that what is keeping many customers from switching is a lack of knowledge surrounding energy prices and common misconceptions relating to the switching process itself. Suppliers across the industry spectrum need to mobilise ‘Inert Customers’ to become active participants in a market that desperately needs their involvement if it is to become truly competitive.

“Inert Customers are an untapped audience, that, once engaged appropriately, have the power to shake up the market and challenge all suppliers to truly operate with the interest of the customer as their central focus.”

Given the impact that Rudd’s strategy is set to make on the energy market this year, surely the time has come for all suppliers, regardless of size, to crack the issue of audience segmentation, differentiation and relevant targeted engagement once and for all.

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Customer inertia

Working with this index, we divided consumers into four groups ranging from the least engaged Unplugged to the most engaged Switched on consumers. Unplugged consumers are least likely to switch, but actually face some of the highest prices for their energy because they tend to use prepayment meters or pay their bills in cash instalments. They also face multiple disadvantages when it comes to getting the best deal: only two thirds are regular internet users; and they are more likely to be on lower incomes and rent their home. They might not be aware of their options to switch supplier or tariff, and those that do consider it to be a hassle.

More of us (38%) are On standby consumers – but this group is hardly more likely to switch than the Unplugged. The group is pretty representative of the population socially and they know they can switch or change tariff if they want to, but it rarely translates into action. It’s not because they are likely to be happy with their supplier – they feel the same as the most Switched on consumers – but because they are ‘sticky’ and don’t do much about it. About half say there’s no real difference in the prices that different energy suppliers charge anyway.

We then move up the scale to those who do act: the Tuned in consumers and the most active Switched on group. These consumers are the most advantaged and are on the internet regularly. Caring about getting the best energy deal also seems to be a characteristic of mid-life: nearly two thirds of this group are aged 35 to 64. Switched on consumers in particular are comparing suppliers online and shopping around to get the best deal for all sorts of services from bank accounts to car insurance.

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Customer inertia - lacking energy

Customers are constantly being urged to switch utility providers. But what are the psychological barriers that stop them?

We're more likely to get divorced than move bank accounts. Four-fifths of people cannot be bothered to look for cheaper gas or electric bills despite the urging of numerous consumer gurus to switch.

In short we'd rather pay hundreds of pounds a year extra on phone, broadband and utility bills rather than have to enter the mind-numbing world of the price comparison websites.

The inertia of the British public has been highlighted after Energy Secretary Chris Huhne chastised people for not seeking out the cheapest gas and electricity deals. "They do not bother," he said in an interview with the Times.

"They spend less time shopping around for a bill that's on average more than £1,000 a year than they would shop around for a £25 toaster." He denies accusing the public of "laziness" but many consumer experts say that the public are apathetic about getting a bad deal...

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Switching tariffs...loyalty schemes

Customers who choose not to switch energy supplier could soon be rewarded with loyalty schemes. However, these incentives are unlikely to match what you would save by switching.

Energy customers who do not switch suppliers could soon be given loyalty bonuses under dramatic plans being considered by some energy firms.

At present, around two thirds of households are still on their provider's expensive standard energy tariff.

These people haven’t bothered to even move onto a cheaper energy deal with their existing provider, let alone switch to a rival firm.

In fact, more than half of energy customers have never switched supplier, according to the Competition and Markets Authority, and collectively they are overpaying by £1.4 billion a year.

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Know your tariff?

Know your tariff

The first step is to determine what deal you are on, and work out whether you are getting the most out of it. In simple terms, there are two types available: most suppliers offer a fixed-rate tariff, of differing lengths; or a variable tariff (sometimes called “standard tariff”). If you are unsure about the tariff you have in place, check your bill or call your supplier.

Variable or fixed: what’s the difference?

With standard variable tariffs, the price you pay for each unit of energy can go up or can go down depending on wholesale costs (however, if your supplier makes a price change they will give you plenty of notice). Conversely, with a fixed tariff your rates are secure for a set period. So even if the market price of gas or electricity goes up, your rates will stay the same.

By choosing a fixed deal, you may pay more in the short term, but you could save more money in the long term, as the price will be guaranteed not to rise for the whole length of the contract. Further, the fixed charge is useful when planning your household budget, and provides peace of mind.

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Switching energy suppliers

Ofgem have published data on the number of customers switching energy suppliers in 2016. 7.7 million gas or electricity switches were done in the UK last year. That is a rise of 26%.

Interestingly the number of switches to small and medium sized companies was 47%. Perhaps a reflection of people’s growing distrust of the bigger companies.

There is still a huge amount of people that can benefit from switching. The 7.7 million figure doesn’t mean 7.7 million households switched. Some people will have switched more than once in a year. Plus many of the switches will be dual fuel customers.

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Switching energy suppliers

UK households switched energy suppliers 7.7m times in 2016 — the highest rate in six years.

Nearly 16 percent of gas and electricity customers shopped around for a better deal and changed supplier, saving up to £230 ($286) a year, according to Ofgem, the industry regulator.

What now?

Some of the UK’s biggest suppliers including Npower, Scottish Power, Co-operative Energy and First Utility have all announced plans to increase standard gas and electricity tariffs in the coming months.

Npower will raise its dual-fuel annual energy bills by an average of 9.8 percent from March 16.

EDF said it will just raise electricity prices.

Ofgem chief executive Dermot Nolan said the increase in customer switching should act as a “warning” to suppliers planning price hikes.

“If they fail to keep prices under control or do not provide a good service, they risk being punished as customers vote with their feet,” Nolan said.

“While today’s figures show good progress, the market is not as competitive as we would like.”

About two thirds of energy customers remain on standard variable tariffs or pre-payment deals. They are more expensive because the unit prices per kilowatt hour of electricity are not fixed, so they can go up or down at any time.

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Measures to improve competition in he energy market (Example)

Pre-pay meters are often found in domestic rented property as the rent paid usually does not cover utilities owing to the difficulty in enforcing charges, especially with short-term tenants. The prepayment market  is less developed than for those who pay by direct debit, cash or cheque. This means that there are fewer tariffs available to these customers and the tariffs that are available are generally more expensive. with fewer suppliers to choose from, demand is price inelastic. 

Buyers are unlikely to switch so prices will be high and consumer surplus, small.  The cap will initially apply to over four million households who prepay for their energy, and will vary for electricity and gas, by meter type and region. Ofgem estimates that many prepayment customers are likely to see reductions in their gas bill of around 10-15% from 1 April 2017 or around £80 a year based on a typical household’s consumption.

Many prepayment customers who use electricity to heat their home such as those on Economy 7 meters will see their electricity bill fall, with reductions of around £80 a year based on a typical household’s consumption.

If the cap is too low, there will be excess demand that is not being met by supplers. Fuel poverty will be replaced by lack of supply of energy.

If the cap fits....

Energy regulator Ofgem has announced the levels of the pre-payment price cap which come into effect this April.

One of the remedies resulting from the Competition and Market Authority’s (CMA) two year investigation of the energy market, the cap will initially apply to over four million households who prepay for their energy, mostly with traditional prepayment meters, and are amongst those least able to benefit from competition.

The levels of the cap vary for electricity and gas, by meter type and region.

Ofgem estimates that many prepayment customers are likely to see reductions in their gas bill of around 10-15% from 1 April 2017 or around £80 a year based on a typical household’s consumption.

Many prepayment customers who use electricity to heat their home such as those on Economy 7 meters will see their electricity bill fall, with reductions of around £80 a year based on a typical household’s consumption.

The CMA found that prepayment meter customers face particularly high levels of detriment.

Competition among suppliers for prepayment customers is less developed than for those who pay by direct debit, cash or cheque. This means that there are fewer tariffs available to these customers and the tariffs that are available are generally more expensive.

Customers with prepayment meters are also more likely to be in vulnerable circumstances than those paying by other means.

The cap is due to expire at the end of 2020 when the roll out of smart meters is set to be completed, which will help prepayment meter customers in particular access better deals.

Dermot Nolan, chief executive of Ofgem, said: “We want all consumers to enjoy the benefits of a more competitive energy market, regardless of their circumstances. Customers who prepay for their energy are denied the best deals on the market available to those using other payment methods. They are also more likely to be in vulnerable circumstances, including fuel poverty. This temporary cap will protect these households as we work to deliver a more competitive, fairer and smarter market for all consumers.”

Welcoming the news, Citizens Advice Scotland energy spokesman, Craig Salter, said: “This is a welcome step which will help some of the most vulnerable consumers in Scotland to make much-needed savings in their bills.

“Evidence shows that PPM customers are generally more likely to be disengaged from the market, have less access to lower cost tariffs, and are more likely to be fuel poor and financially vulnerable.

“We are concerned however that this cap is set at a significantly higher in the north of Scotland than elsewhere, as this area has high levels of fuel poverty, and PPM consumers in the North of Scotland already pay 7.7% more for their electricity than the UK average.

“Even with the benefit of the Hydro Benefit Replacement Scheme, PPM consumers in the North of Scotland are likely to continue to pay more than other areas. We would be keen to meet with Ofgem to discuss ways of resolving this issue.”

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£1.7bn overcharged...but this is being challenged.....

UK energy companies have set out how they intend to encourage customers to switch to cheaper deals, as the government comes under pressure to take further action to help households


Bills that are easier to understand, tariff “health checks” and long-term fixed-rate deals are among the initiatives proposed by electricity and gas suppliers, as they try to ward off further government intervention.  

Suppliers have come under a renewed spotlight after three of the “big six” suppliers — Npower, EDF Energy and ScottishPower — announced an increase in rates this year for customers on standard variable rates; a move the government has described as “completely unacceptable”.  

Consumer group Which? asked suppliers to submit plans on how they would help households on expensive deals to switch instead of waiting for further regulatory moves.

Around two-thirds of UK households are on standard tariffs which tend to be more expensive than fixed deals, according to Ofgem, the energy regulator. All of the big six, bar EDF Energy, have published their individual plans, which have been passed to ministers and Ofgem. EDF said it did not believe “the solution lies in each energy company setting its own plan” and pointed to industry-wide remedies last year from the Competition and Markets Authority following a two-year probe into the market. 

Npower, which is raising prices by almost 10 per cent for half of its customers, is offering households on standard rates to fix prices until 2021 through a deal that should save them about £57 a year.  British Gas, which has among the highest proportion of customers on standard tariffs, at 74 per cent, has been testing a “simplified” bill with 45,000 customers to make it easier to understand if money could be saved by changing deals. 

Which? wants ministers and Ofgem to report on suppliers’ progress by the end of April. 

Alex Neill, managing director of home and legal services at Which? said: “Recent price hikes show once again that it's people stuck on the most expensive tariffs that are losing out through a lack of competition in this market.” The CMA said customers had been overcharged by £1.7bn a year by energy companies, although that finding was challenged by some industry leaders.  This article has been corrected to change a reference to British Gas having the highest proportion of customers on standard tariffs, to British Gas having among the highest proportion on standard tariffs

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Overcharging by £1.7bn?

The competition regulator is preparing to drop its earlier judgment that Britain’s largest energy providers overcharge customers by £1.7bn a year.

After two years compiling it, the Competition and Markets Authority is due to publish its report into the energy market on 24 June.

It is expected to omit the claim that the big six providers charged customers £1.7bn too much a year between 2009 and 2013, the Financial Times reported(partial paywall). The CMA had said the overcharging was particularly damaging for vulnerable groups without the means or will to shop around.

The claim, made in an interim report last July, will be replaced by a statement that households and small and medium-sized businesses could have saved that amount if they had switched provider, the FT said.

The stories you need to read, in one handy email

 

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The energy companies, including British Gas and SSE, were furious about the £1.7bn figure, which they called misleading, and have lobbied hard for the CMA to change its stance. They have said the energy market is highly competitive and that their profits are in line with the risks they take.

The regulator has already been criticised for watering down its initial proposals. It has called for a price cap on tariffs covering 4 million households on prepaid meters but it has not widened the cap to cover customers stuck on expensive standard variable tariffs.

The CMA inquiry was established to clear up whether SSE, Iberdrola’s Scottish Power, British Gas-owner Centrica, RWE npower, E.ON and EDF Energy were abusing their dominance of the market. But the regulator has retreated from more radical proposals including the extreme option of breaking up the big operators.

The watchdog opened its inquiry in 2014 in response to growing unrest about energy costs and the opposition Labour party’s pledge to freeze bills and restructure the industry if it won last year’s general election.

The big energy companies were prepared to challenge the CMA in court over the £1.7bn claim but the change of wording will remove that threat, the FT reported.

A CMA spokesman was not immediately available to comment.

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Common Fisheries Policy

Arguments for and against

Revision notes on aspects of the common fisheries policy of the EU and the crisis in the industry

• This is an industry in crisis made worse by policy failings
• And the crisis may well have been made worse by deficiencies in the EU’s own common fisheries policy (CFP)
• At the heart of the problem is overfishing – the ‘tragedy of the commons’ - 30% of EU fish stocks are beyond safe limits.
• EU quota system does not work well in restoring fish stocks
• EU fishing sector suffers from overfishing, fleet overcapacity, heavy subsidies and decline in the volume of fish caught.
• Declining industry creates structural problems for many EU regions
• Environment aspects of industrial and ocean fishing are important too
• Questions might consider the nature of market and government failure and options for protecting the industry and giving it a sustainable future

The major challenge facing the Common Fisheries Policy (CFP) is to strike a sustainable balance between the available marine resources and their commercial exploitation. Fish stocks have been falling and permanent, irreversible resource depletion may have already occurred because of over-exploitation and the government failure of EU fishing policy. Over-fishing in the EU has lead to smaller stocks, reduced landings and declining incomes for producers but higher prices for consumers.

Over-fishing is a cause of market failure arising from a failure to enforce agreed fishing quotas and the absence of enforceable property rights for what is perceived to be a common ownership of a natural and renewable resource.

CFP and government failure

1. CFP sets maximum quantities of fish that can safely be caught every year
2. CFP has been criticised for poor monitoring and enforcement. It is a good example of government failure. 
3. In 2007 the European Court of Auditors declared that CFP was failing as a policy with consequences for the long term future of the European fishing industry. 
4. Maximum quantities, called total allowable catches are divided among Member States. Each country’s share is called a national quota – there is always intense political pressure for countries to seek an increase in their own allowable catch.
5. Trawlers arriving at port with more fish than they are allowed dump the excess at sea worsening the problem of falling fish stocks
6. Extra EU funding is available for the modernisation of the fishing fleets as well as for getting rid of excess fishing capacity by encouraging some fishing businesses to leave the industry.

Policy options for giving fishing a sustainable future

Options include

1. Ending financial subsidies for building new trawlers + transitional payments for fishing crew members to leave the industry move into alternative employment
2. Limiting the number of days fishing vessels spend at sea
3. Putting fish spawning grounds out of bounds to allow the fish to reproduce 
4. Enforcing regulation that requires fishing vessels to use nets with larger mesh sizes or special panels to let juvenile / smaller fish escape. Many want ‘bottom-trawling’ to be banned – this is where heavy rollers are dragged across the ocean floor, ripping up everything in their path.
5. Establish ‘no-take marine protected reserves’ or National Parks of the Sea
6. Encourage a system of tradable quotas similar to the system employed in Iceland where there is an annual allowable catch rate of 25% of the fishable stock – permits are issued on that basis. Of course if stocks increase, so too can the annual catch allowed under this system – this gives the right incentives to fishing businesses to operate within the traded permits system. There is an active market for catching rights and their price is determined by current supply and demand.

Source: Tutor2u

Government failure - causes

Political self interest

Poor value for money

Policy short termism

Regulatory capture

Conflicting objectives

Bureaucracy and red tape

Unintended consequences (plastic bags)

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Also, for the research....

More on plastic bags

Interesting micro posts

Common Fisheries Policy - Government Failure

Government Failure – Fisheries Policy in the European Union Few policies have attracted as much criticism and contempt as the Common Fisheries Policy of the European Union. To many it is a prime example of government failure; a policy with good intentions that has failed to achieve its objectives and caused much deeper problems for the European fishing industry. At the heart of the problem is overfishing – the 'tragedy of the commons' - 30% of EU fish stocks are beyond safe limits. The EU quota system does not work well in restoring fish stocks and the EU fishing sector suffers from overfishing, fleet overcapacity, heavy subsidies and decline in the volume of fish caught. Many European governments seek to protect the interests of their own fishing businesses rather than agree on a policy that will benefit the EU Sea fishing industry as a whole. Over-fishing is a cause of market failure arising from a failure to enforce agreed fishing quotas and the absence of enforceable property rights for what is perceived to be a common ownership of a natural and renewable resource. One key demand for reform is to end dumping of discarded fish. Currently, up to half the catch of some species has to be discarded because vessels have exceeded their quota, or because the fish are undersized.

Causes of Government Failure

Government intervention can prove to be ineffective, inequitable and misplaced.

(a) Political self-interest

• The pursuit of self-interest amongst politicians and civil servants can often lead to a misallocation of resources.

• For example decisions about where to build new roads, by-passes, schools and hospitals may be decided with at least one eye to the political consequences.

• The pressures of a looming election or the influence exerted by special interest groups can foster an environment in which inappropriate spending and tax decisions are made. - e.g. boosting welfare spending in the run up to an election, or bringing forward major items of capital spending on infrastructural projects without the projects being subjected to a full and proper cost-benefit analysis to determine the likely social costs and benefits. Critics of current government policy towards tobacco taxation and advertising, and the controversial issue of genetically modified foods argue that government departments are too sensitive to political lobbying from the major corporations.

(b) Policy myopia

• Critics of government intervention in the economy argue that politicians have a tendency to look for short term solutions or "quick fixes" to difficult economic problems rather than making considered analysis of long term considerations.
• For example, a decision to build more roads and by-passes might simply add to the problems of traffic congestion in the long run encouraging an increase in the total number of cars on the roads.
• The risk is that myopic decision-making will only provide short term relief to particular problems but does little to address structural economic problems.
• Critics of government subsidies to particular industries also claim that they distort the proper functioning of markets and lead to inefficiencies in the economy. For example short term financial support to coal producers to keep open loss-making coal pits might prove to be a waste of scarce resources if the industry concerned has little realistic prospect of achieving a viable rate of return in the long run given the strength of global competition.

(c) Regulatory Capture

• This is when the industries under the control of a regulatory body (i.e. a government agency) appear to operate in favour of the vested interest of producers rather can consumers
• Some economists argue that regulators can prevent the ability of the market to operate freely. We might find examples of this in agriculture, telecommunications, the main household utilities and in transport regulation.
• For example, to what extent has the system of agricultural support known as the Common Agricultural Policy operated too much in the interests of farmers and the farming industry in general? And as a result, has the CAP worked against the long-term interest of consumers, the environment and developing countries who claim that they are being unfairly treated in world markets by the effects of import tariffs on food and export subsidies to loss-making European farmers?

(d) Disincentive effects

• Free market economists who fear government failure at every turn argue that attempts to reduce income and wealth inequalities can worsen incentives and productivity. They would argue against the National Minimum Wage because they believe that it artificially raises wages above their true free-market level and can lead to real-wage unemployment.
• They would argue against raising the higher rates of income tax because it is deemed to have a negative effect on the incentives of wealth-creators in the economy and generally acts as a disincentive to work longer hours or take a better paid job.

(e) Government intervention and evasion

• A decision by the government to raise taxes on de-merit goods such as cigarettes might lead to an increase in attempted tax avoidance, tax evasion, smuggling and the development of grey markets where trade takes place between consumers and suppliers without paying tax

A decision to legalize and then tax some drugs might lead to a rapid expansion of the supply of drugs and a substantial loss of social welfare arising from over consumption.

(f) Policy decisions based on imperfect information

• How does the government establish what citizens want it to do in their name? Can the government ever really know the true revealed preferences of so many people?

• Often a government will choose to go ahead with a project or policy without having the full amount of information required for a proper cost-benefit analysis. The result can be misguided policies and damaging long-term consequences.

• How does the government know how many extra houses need to be built in the UK over the next twenty years? Is building thousands of extra homes in an already congested South-east the right option? Are there better solutions? There have been plenty of instances of government housing policy having failed in previous decades!

(g) The Law of Unintended Consequences

• The law of unintended consequences is that actions of consumer and producers — and especially of government—always have effects that are unanticipated or "unintended." Particularly when people do not always act in the way that the economics textbooks would predict

• The law of unintended consequences is often used to criticise the effects of government legislation, taxation and regulation. People find ways to circumvent laws; shadow markets develop to undermine an official policy; people act in unexpected ways because of ignorance and / or error. Unintended consequences can add hugely to the financial costs of some government programmes so that they make them extremely expensive when set against their original goals and objectives.

(h) Costs of administration and enforcement

Government intervention can prove costly to administer and enforce. The estimated social benefits of a particular policy might be largely swamped by the administrative costs of introducing it.

Key points about government failure

1. Free market economists are distrustful of intervention. They believe that the price mechanism should be given freedom to operate
2. Often we can accuse the government of policy failure only with the benefit of hindsight
3. Limited information - no government has the resources and information available to it to make fully-informed, objective judgements. That is the nature of politics.
4. Government failure is most likely to occur when decisions are made in the vested interest of special interest groups, at the expense of other groups (the result is a loss of equity)

Read more - and make sure you read the whole article

Common Fisheries Policy

The EU Common Fisheries Policy (CFP), more commonly referred to as the EU’s “disastrous fishing policy”, the EU’s “most discredited and unpopular policy” or simply “the worst EU policy”, is without a doubt one of most maligned pieces of EU legislation. With a referendum on the UK’s EU membership on the horizon, it is important to take a step back and consider whether the CFP has helped or hurt UK fisheries.

Fishing quotas are leading to stock recovery

While ecosystems are certainly complex, the mechanics of sustainable fisheries are well understood. As fish populations have been depleted and are producing fewer offspring, efforts to reduce fishing pressure would rebuild fish stocks and lead to larger harvests in the future. It’s a key tenet of fisheries economics but it still surprises many people that sustainable management would mean higher, not lower, catches than we are currently achieving. This higher volume of catches would bring both economic and social benefits.

This key principle of reducing fishing pressure to achieve fish stock recovery is finally being implemented in EU waters. As in most fisheries in the developed world, one of the key mechanisms for preventing overfishing is the use of fishing quota – a limit on the amount of a particular fish stock that can be caught.

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Common Fisheries Policy

The EU's Common Fisheries Policy failed to achieve its central objectives, the government's review of the balance of power between the UK and the EU has concluded.

Those submitting evidence to the review "overwhelmingly" felt it had not successfully maintained fish stocks, the government said.

This had prompted "significant debate on how well the UK's national interest is served" by the policy, it added.

But recent reforms had helped, it said.

The government began an audit of all the policy areas over which the EU institutions exercise power in July 2012, consulting widely with organisations and individuals with an interest in each policy area, and has published its findings in phases since July 2013.

The latest batch of reports focused on fisheries, agriculture, human rights, social cohesion, energy, the free movement of services, competition and consumer policy, financial services, the EU budget, and employment.

In its review of fisheries policy, the government noted that the UK had been calling for fundamental reform of the Common Fisheries Policy (CFP) for many years.

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Five links to click and learn from today

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Rent controls are not the answer

The country is experiencing the turmoil of high rent and low salaries and have voted to leave this at the hands of the Conservative party.

Prior to the election, the Labour and Conservative parties had many heated debates over rent control and its potential to help struggling citizens keep their homes. ThisIsMoney reported that rent in England has risen above inflation at about 4.2% in the past five years and while rent control is widely supported by tenants who want a quick-fix solution, the practice has proven time and time again to be counterproductive to the long-term health of the housing market.

The root of the issue in the UK is a low housing supply and placing a cap on rents will only slow down growth by discouraging investments. This refers not only to investment of new property but also in the upkeep of current property. By suppressing landlords’ means, we will inherently affect their financial ability to routinely refurbish their property and this will lead to poor living conditions – particularly among the poor.

Rent control began in London during the First World War and continued until the Housing Act of 1988 which deregulated the rental market for all leases after January 15, 1989. Like London, New York City used rent control in order to protect citizens returning home after World War II and continued through the 1970s. 

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Air pollution

An EU review has revealed multiple failings by the UK in applying environmental law, on the same day that the commission escalated its action against Britain for breaching air pollution limits.

Britain has been in breach of EU nitrogen dioxide (NO2) limits since 2010, with London overshooting its annual air pollution limit for the whole of 2017 in just the first five days.

The Guardian understands that a “reasoned opinion” will now be sent on 15 February to the UK and four other countries: Germany, France, Italy and Spain. If a satisfactory response is not received within two months, a case at the European court could follow.

“In principle it could start later this year, but first we have to decide on a referral to court,” an EU source said. “Your goal is always to get them [infringing countries] to comply without taking them to court.”

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