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It’s make or break time for energy suppliers

Energy prices up

The results are in. The outcome of the long-awaited energy market assessment was released today and it’s good news for the 45,000 of you who backed our Fix the Big Six campaign. But we haven’t won yet…

Ofgem has decided that the energy market should be referred to a full scale competition inquiry.

The assessment found that retail profits increased sharply between 2009 and 2012 with little evidence of increasing efficiency from the suppliers.

It also expressed concern that the structure of the market means that it doesn’t work for the good of its customers.

We hope that this provides an opportunity to quickly address and resolve the underlying problems of a fundamentally broken energy market. We know that energy prices are consistently at the top of consumer concerns, and we know that levels of trust in the energy industry are at disastrously low levels – just one in five of you think your energy provider will act in your best interests.

A competitive energy market?

The inquiry has to take a long hard look at a structure that allows big energy companies to keep a stranglehold on vast swathes of the market.

The practice of buying and selling energy to themselves should be brought to an end and this can only be done by separating the supply and generation parts of their businesses, just as SSE committed to doing yesterday. This would add a level of transparency to the market and would provide a much greater degree of confidence that we’re being charged a fair price for the energy we use. Plus, SSE’s action proves that suppliers don’t have to wait to be forced to act – they can do so on their own right now.

Rebuilding trust in the energy market

The process of rebuilding trust in a market that has taken all of us for granted will take time, but this is a crucial first step. It’s good news that the regulators have listened to the tens of thousands of people who have supported our Fix the Big Six campaign. We now need the investigation to work quickly to expose what’s really happening in the energy market and confirm where competition is lacking.

We’ll be working hard to ensure your voice is being heard throughout the investigation, and we’ll continue to argue for radical reforms to ensure that the market works competitively for everyone – especially for the millions struggling with spiralling bills.

What do you think about today’s announcement? Is this the start of a journey towards an energy market that works in your best interest?


The big six is a price rigging cartel,always has been and always will be.One of them could halve their prices and take over all supplies,but it will never happen because it is a closed shop.

Ian says:
31 March 2014

Scrap standing charges altogether.
If I owned a Energy Company I would have only ONE SIMPLE TARRIFF for ELEC/GAS for everyone.
OAP’s during the Winter period no matter how long the cold spell – FREE.
How many of the big six would follow suit ?
Especially if I took away, a lot of customers, from them. Only then would they bring there prices down and offer similar schemes.
That’s COMPETITION not ONE puts up the prices and the others follow suit.
They make MORE money from distribution, than from the customer. They don’t tell you that.
Are well I can but DREAM.

Paul Hunt says:
31 March 2014

Politically, the proposed decision by Ofgem, supported by the CMA and the OFT, to refer the “supply and acquisition of energy in Great Britain” to the CMA is a ‘big deal’. It is intended to shoot the fox that the Labour leader set running with his commitment at his party’s conference last September, if elected, to impose a price freeze. It was not before tme for Labour to begin thinking about repairing the damage it had done over 13 years.

Gordon Brown’s windfall tax set in train a decade of asset sweating and flipping, equity extraction, high leverage, financial engineering, tax avoidance and the hollowing out of balance sheets that actually kept final electricity and gas prices low in real terms. The excessive national subsidisation of intermittent renewables that accompanied the onset of the Great Recession, combined with the shale gas boom in the US releasing supplies, and lowering the price, of internationally traded coal, with a large share of oil-indexed external gas supplies, and with the phase-out of Germany’s nuclear fleet, all hammered the balance sheets, share prices and market cap of the major European energy companies.

The reality is that final energy prices in Britain have only begun to catch up with excessively high prices in much of the rest of the EU as the big energy companies seek to repair their balance sheets. Four of the UK’s Big 6 are subsidiaries of four of the EU’s Big 7 and are doing their best to help their parents at the expense of consumers in Britain. SSE and Centrica are going along happily for the ride.

This proposed UK inquiry will achieve little, though a comprehensive inquiry by DG COMP might achieve something of substance. The solutions lie in a reduction in the excessive subidisation of intermittent renewables, the acceleration of approvals of US LNG export projects, the repair of the EU ETS, the development of a competitive EU market in gas transmission pipeline capacity, complete ownership separation of the currently vertically integrated wholesale and retail businesses, the re-establishment of currently captured energy regulators to ensure they strike a balance between the interests of investors and those of final consumers, the roll-out of smart meters to all final consumers, limited government guarantees during the construction and early operations phases of energy infrastructure projects and the restriction of subsequent ownership to genuine long-term, ‘rate’ investors.

The proposed inquiry is incapable not only of addressing the real underlying detriments, but of identifying and enforcing these remedies.

John says:
31 March 2014

All the above letters cover most of the subjects that the energy suppliers should put right I will add a question, How many members of the government are share holders in the Energy companies and would not support any change, as it will affect the bonus paid to them.

Sally Montgomery says:
27 April 2014

I would say too many, we have major problems not only with the cost of energy itself but also the standing charges and as for energy saving that’s a laugh with the poorest paying for the rich to get richer. When pensioners shiver under blankets in uninsulated homes while paying for private landlords and millionaires to reap the benefits something is very wrong

Jo says:
1 April 2014

I must be missing something but I CANNOT understand why the Labour Party are not promising to re-nationalise? They would walk the next election and Milliband would go down in history as a brave leader, doing the right thing for the people. I don`t believe it`s because they are associated with energy companies or have shares, as a so-called Socialist party they`d have too much to lose if found out whereas people just believe that of the Tories anyway.


Jo: I was tuned into the energy debate from The House of Commons this am and the question of Labour freezing energy prices was raised several times and the response was always that it would drive away competition [what competition?] and would lead to increased prices at the end of the period!

I don’t recall any questions regarding re nationalisation as I had to leave before it finished but if this went ahead I would imagine there would again be questions raised about competition keeping prices down and perhaps more importantly questions about increases in general taxation to pay for it which maybe wouldn’t go down very well in a pre election year. The aim was focused on the CMA to attempt to fix the broken market by re establishing competition and introducing more suppliers into it.


With the wholesale price of Gas at a 30 month low, you’ve gotta love how some politicians are only talking about a freeze. I wonder when they’ll talk about a reduction. #theyhaventgotaclue

Ken says:
17 April 2014

Nationalisation solves nothing, except maybe to protect an inefficient industry – we need competition within a diversified industry producing energy in a variety of ways which does not make the UK hostage to Russian politics, US shale gas, Middle Eastern oil etc. That requires a government led energy strategy.