Energy profits 'eroding trust'

Trust in the energy market is being undermined by a lack of transparency about profits being made by companies, MPs warned today.

Energy UK CEO: 'Profits are necessary'

Angela Knight, chief executive of industry trade association Energy UK, has defended the profits the sector makes.

Energy UK CEO Angela Knight defended the profits the sector makes.
Energy UK CEO Angela Knight defended the profits the sector makes. Credit: PA

She told BBC Radio 4's Today programme that profits are dependent on world energy prices were necessary so companies could invest in infrastructure.

"Profit is actually a good thing and a very important thing because of the huge amount of investment that needs to be made in this country."

Fuel strategy needs 'legally binding targets'

The Citizens Advice Bereau said that the Government's fuel poverty strategy should include "comprehensive, legally binding targets to end fuel poverty" to avoid a "vicious cycle" of rising bills and increasing poverty.

It's infuriating for struggling consumers to see announcements of record-breaking profits as they struggle to meet ever-higher energy bills, but pinning all our hopes on increased transparency is simply not enough to help the millions of people who are forced to cut back on essential spending or run up debts in order to meet the cost of their energy bills.

– Gillian Guy, chief executive of Citizens Advice

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Ed Davey: 'Big Six' need to be more transparent

Ed Davey, the Secretary of State for Energy and Climate Change, has told Daybreak he is "very worried" about people's electricity and gas bills and said the "big six" energy companies needed to be more transparent.

"They need to be held accountable for the profits they make and they need to declare them in a much clearer way," The Liberal Democrat MP said.

UK energy markets 'not working in public interest'

Britain's energy market is "not working in the public interest" and regulator Ofgem is "failing consumers", shadow energy secretary said today.

Caroline Flint said:

This report is yet more evidence that Britain's energy market is not working in the public interest and that Ofgem is failing consumers.

Time after time Ofgem has ducked the opportunity to get tough with the big energy giants. That is why Labour have said we would abolish Ofgem and create a tough new watchdog with powers to force energy companies to pass on price cuts and clamp down on abuses by the energy giants.

Energy firms 'profiteering at expense of public'

More needs to be done to stop the Big Six energy companies profiteering at the expense of hard-pressed households and the planet, charity Friends of the Earth said today, after MPs warned profits were seen to be "eroding trust".

Energy campaigner Guy Shrubsole said:

MPs have hit the nail on the head - more needs to be done to stop Big Six profiteering at the expense of hard-pressed households and the planet.

The energy companies continue to rake in huge profits while the Government fails to insulate our heat-leaking homes and keeps us hooked on the gas that's sent our fuel bills spiralling.

Ministers must set a clean power target to make the big energy firms invest in affordable renewable energy - and open up the market to communities generating their own renewable power from wind and solar schemes.

Households to get 'best deal' in energy prices

The Government is "doing all they can" to help consumers keep their energy bills down, the Energy and Climate Change Secretary said today, after MPs warned energy regulator Ofgem to ensure energy companies were "transparent" over their profits.

Energy and Climate Change Secretary Edward Davey. Credit: Nick Ansell/PA Wire

Ed Davey said: "We are using the Energy Bill to ensure that all households will be able get the best deal for their gas and electricity as soon as possible.

"This means getting people off poor-value dead tariffs, cutting the number of tariffs and giving consumers clear personalised information on their bills so they can compare and switch supplier.

"Our policies to support renewable energy and reduce energy waste are insulating consumers from the rising cost of fossil fuels. And by 2020, our analysis shows household energy bills will on average be £166 lower than they would be if we did nothing."

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Ofgem attempting to 'restore consumer trust'

Energy regulator Ofgem has welcomed a Select Committee report on energy profits, which found that the regulator was not doing enough to ensure that energy company profits are "transparent".

Ofgem's senior partner for markets, Rachel Fletcher, said:

We share the committee's goal of restoring consumers' trust. This aim underpins our reforms which seek to get energy companies to deal with consumers in a simple, clear and fair way.

We agree with the committee that suppliers have been poor at communicating with their customers. That is why Ofgem has taken the lead in pursuing transparency across all sections of the energy market.

Ofgem has made energy companies produce yearly financial statements, which have been reviewed twice by independent accountants and found to be fit for purpose.

Which? slams energy companies over fuel prices

Consumer watchdog Which? have criticised energy companies over its "lack of transparency", after MPs warned that trust was waning.

Which? slams energy companies over fuel prices. Credit: PA

Which? executive director Richard Lloyd said: "Hard-pressed consumers consistently tell us that the spiralling cost of their energy bills is one of their top financial concerns, with energy companies trusted by fewer than a quarter of their customers.

"People will not feel confident that they are paying a fair price for their energy unless prices are simplified and the costs that make up our energy bills are open, transparent and subject to robust scrutiny.

"The Government and regulator must do more to rebuild trust in the suppliers and to keep prices in check".

Energy companies 'not addressing fuel poverty' enough

Fuel poverty charity NEA has welcomed a report reprimanding energy companies for their "lack of transparency". The charity said that current measures to address the level and depth of fuel poverty did not constitute an "ambitious strategy."

External affairs manager Peter Smith said:

It is therefore crucial that in the coming months the Government accept there is a strong need to address well documented deficiencies and ensure that there is adequate and proportionate assistance which is accessible to low income vulnerable households to protect them from rising energy costs.

'Forensic accountants' needed to figure out energy bills

MPs have made a series of recommendations to energy companies, including making energy bills easier to understand and for prices to be compared with those of other companies, after they warned that "trust" was "eroding".

There were "serious shortfalls" in the way energy companies communicated with customers, although improvements have been made, said the report.

Speaking on behalf of the committee, Liberal Democrat MP Sir Robert Smith said:

At a time when many people are struggling with the rising costs of energy, consumers need reassurance that the profits being made by the Big Six are not excessive.

Unfortunately, the complex vertically integrated structure of these companies means that working out exactly how their profits are made requires forensic accountants.

Ofgem should shine a brighter light on the internal structure of these big companies.

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