Break-up threat to Big Six energy firms

Regulators have called for an investigation into the UK's Big Six energy suppliers amid soaring household bills and rocketing profits.

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Government: Already helping firms 'get fairer deal'

The Department for Energy and Climate Change said that a cross-industry working group had already been set up to address key issues of concern, including improving options for repaying back-dated bills.

Small businesses deserve a fairer and more transparent energy market to help ensure they are getting the best energy deal.

Today's announcement of the first ever market reference for the energy market will help small businesses as well as householders get a fairer deal on their energy.

– DECC spokesman

Govt 'doing everything' it can to tackle fuel poverty

The Government is "doing everything within its power" to combat fuel poverty, according to a spokesperson for the department of Energy and Climate Change

The spokesman claimed the Energy Companies Obligation scheme, extra funds for energy efficiency programmes and the winter fuel allowance would help those who could not afford to heat their homes.

The Government is doing everything within its power to help hard-pressed families keep their energy bills down.

In December, we announced plans that will save customers around £50 on their energy bills, protecting support through the Energy Companies Obligation scheme for vulnerable households, extending the scheme for an extra two years and making an additional £450 million available to make Britain's homes more energy efficient.

– A Department of Energy and Climate Change spokesman

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Miliband: Energy prices 'unfair' to small businesses

Ed Miliband is due to say today:

It is unacceptable that companies like yours do not have even basic protections that are available to households under the law from unfair energy contracts.

– Ed Miliband

Labour would also give business organisations like the FSB new legal rights to take cases - such as late payment by firms or government departments - to court on behalf of their members.

It would also invite the FSB to join Which? and Citizens Advice in helping to set the agenda for the Competition and Markets Authority's investigations to ensure markets were working properly in the interests of consumers and businesses.

Miliband promises business protection from fuel costs

Ed Miliband will speak at FSB conference in Manchester. Credit: PA

Labour leader Ed Miliband is to make a fresh attempt to reach out to business with a promise to protect small firms from "unfair" treatment at the hands of the energy companies.

In a speech to the Federation of Small Businesses (FSB) in Manchester, he will say that a Labour government would reform the energy market to ensure small firms were given the same legal protections as householders.

These would include establishing a new energy regulator with powers to suppliers from rolling firms on to more expensive tariffs without their consent or hitting them with "crippling" back-bills for periods of longer than a year.

'Invest in old and cold housing' to combat fuel poverty

The Government needs to make fuel efficiency programmes more widely available if it is to tackle fuel poverty, according to experts.

National Energy Action (NEA) chief executive Jenny Saunders called on the Coalition to "invest in old and cold housing":

4.5 million UK households are living in fuel poverty - on low incomes and with unaffordable energy bills.

The only sustainable way to tackle this problem is to invest in our old and cold housing stock.

In England, only £3.52 in Government funding is available per domestic electricity consumer to improve domestic energy efficiency compared to an average spend of £31.78 in the other nations.

Additional resources must be made available to improve the heating and insulation of our poorest households.

– Jenny Saunders

Read: 4.5m 'living in fuel poverty' in UK warn experts

4.5m 'living in fuel poverty' in UK warn experts

An estimated 4.5 million UK homes are living in fuel poverty and the Government is not doing enough to tackle the crisis, according to a report.

Read: Over two million children in the UK are 'growing up cold'

Fuel poverty
National Energy Action called on the Government to do more to make energy efficiency programmes available to the poorest households. Credit: PA

Read: Fuel bill cuts after Govt pledge

The UK Fuel Poverty Monitor (FPM) those living in Northern Ireland, Wales and Scotland were more likely to struggle with fuel poverty but they also had greater access to energy efficiency measures.

The average investment on energy efficiency programmes for low income households in England was just £3.52 per electricity customer, compared to £36.48 in Scotland, £31.31 in Wales and £27.55 in Northern Ireland, the report stated.

Homes eligible for assistance with insulation and other energy saving costs were not receiving it because the measures were too costly or potential customers were being asked for a contribution they could not afford, FPM said.

Read: 'Big Six' energy firms to face major competition inquiry

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Ofgem: Inquiry should look at profits and customer trust

Ofgem has highlighted several key areas the Competition and Markets Authority should look at in its inquiry of the energy market, including possible tacit co-ordination and profits made by the 'Big Six'.

The energy watchdog has outlined the following areas:

  • Customer trust: The review found that consumer trust had fallen with 43% of customers not trusting energy suppliers to be transparent with them.
  • Entry barriers: The large suppliers own infrastructures such as power stations and supply businesses meaning it is difficult for new entrants to the market.
  • Possible tacit co-ordination: Ofgem did not find evidence of explicit collusion between suppliers. However, the watchdog found evidence of possible tacit co-ordination in the timing and size of price announcements.
  • Profits: The average profits for the 'Big Six' have increased from £3bn to £3.7bn in three years. Ofgem said it noted the increase and questioned suppliers saying that 5% is a fair margin.

Click here to read Ofgem's review into the energy market

Centrica boss: Big energy firms 'absolutely not a cartel'

The boss of Centrica, which owns British Gas, told ITV News the 'Big Six' energy firms are "absolutely not a cartel" after Ofgem's review found evidence of possible tacit co-ordination.

The energy watchdog said it did not find evidence of explicit collusion between the firms but said the timing and size of price announcements were part of the evidence that showed possible tacit co-ordination.

Sam Laidlaw told ITV News he "refutes totally" the idea that the 'Big Six' are a cartel and claimed that the energy market is "vibrant" and "very competitive."

Read: Inquiry a significant moment but it will take two years

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