Huhne calls for consumers to switch energy suppliers

 

Chris Huhne: "Consumers can know that they will get the fair deal as well"

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Energy Secretary Chris Huhne has said that people have to check that they are on the cheapest available energy tariff and whether they could save money by paying by direct debit.

He was speaking after a summit with the six biggest power firms, consumer groups and regulator Ofgem.

The summit discussed whether bills were higher because of lack of competition.

The prime minister said that the government needed to work "harder and faster" to bring down energy bills.

David Cameron called for a "trusted, simple and transparent" market.

"We should be checking to see whether or not we're on the cheapest tariff," Mr Huhne said after the summit.

"We should be switching if we're not on the cheapest tariff and taking the opportunity ahead of this winter to really make sure that we're insulating so that we can save money."

'Inconvenient truth'

David Cameron: "We need to make sure that the energy market is competitive"

British Gas, Scottish Power, Npower and EDF have pledged not to raise prices again this winter.

SSE has already said prices will not rise again until August 2012 at the earliest.

However, Phil Bentley, the managing director of British Gas, the UK's biggest domestic energy supplier, warned that prices in the longer term would keep on rising because of the rising cost of gas on the international market.

"We are importing 50% of the gas that comes into Britain and we are having to compete for sources from the Middle East - Japan is importing huge amounts of gas on ships and that was gas that used to come into the UK market," he said.

Analysis

If anybody thought that at the end of today their energy bill was going to come rocketing down, then that absolutely was not the case.

Chris Huhne's argument seemed to be that at the end of the day it's up to us, the consumers, to shop around and we should not expect the government to somehow resolve the issue of high energy prices.

The difficulty is there is a limited number of levers the government can pull because these are private companies - they're not charities.

Chris Huhne has been going around today saying, "They're not the Salvation Army," and that pretty much is the bottom line.

"It is an inconvenient truth that unit prices of energy are going to go up.

"In my opinion unit prices will only go one way unless someone discovers huge amounts of gas and imports it into the UK: the international price for gas I am afraid is going up," Mr Bentley added.

Getting tough

Last month, Labour leader Ed Miliband attacked the "rigged" market in Britain, while Energy Secretary Chris Huhne said he planned to "get tough" with the firms.

Regulator Ofgem has predicted a rise in firms' prospective profit margins from £15 to £125 per customer - figures challenged by the industry.

Ofgem has also announced plans to simplify tariffs in order to allow customers to compare prices more easily.

Last week one firm, SSE, said its power would be sold on the open market rather than going straight to its supply arm.

Experts say if the other five big firms followed suit it could save customers a lot of money.

Reduce wastage

In a joint statement with Mr Huhne on the MoneySavingExpert.com website, Mr Cameron said they could not control volatile world energy prices, "but we can still help people get their bills down".

Ed Miliband: "The energy companies are not giving a good deal, a fair deal"

"The easiest ways to get energy bills down quickly are to get people paying the lowest possible tariffs and to reduce the amount of energy that is wasted," the statement added.

"Our intention is for today's summit to be the start of a much more active engagement with consumers, with us all working harder and faster to deliver an energy market that is trusted, simple and transparent."

But shadow energy secretary Caroline Flint insisted the government's "warm words" wouldn't "heat homes during a bitter winter".

"They're unable to take on vested interests, they won't tackle the spiralling prices imposed by the energy giants, they won't investigate the mis-selling of energy and they won't help the pensioners whose winter fuel payments have been cut," she said.

£1,000 level

The cost of gas and electricity has risen by up to 18% in the past few weeks, with the cheapest dual-fuel deals - for those with online deals - having risen above the £1,000 level for the first time.

This prompted the Department of Energy to call the summit to examine ways in which customers can take action to save money.

But the consumers' association Which? said the meeting should look at more fundamental factors affecting the market.

"We need commitments from suppliers and the government to put an end to practices that harm consumers and action to create a competitive energy market that works for everyone," said executive director Richard Lloyd.

Mike O'Connor, chief executive of watchdog Consumer Focus, said: "Government, energy firms and consumer organisations have a responsibility to make sure that consumers get all the help they need to cut their bills."

Simplification plan

Last week, the regulator, Ofgem, published its simplification plan, which said suppliers would be forced to have no-frills tariffs, which would consist of a standing charge - fixed by the regulator - plus a unit charge for energy used.

It means the only number consumers would have to compare between suppliers would be the unit energy charge.

Ofgem will publish its detailed proposals for consultation next month and hopes to have implemented some of its reforms in time for winter 2012.

A year of energy price rises

Month 2010-11 Company Price rise

Source: Company announcements

November

Scottish Power

Gas: 2% Elec: 8.9%

December

Scottish & Southern

Gas: 9.4%

British Gas

Gas: 7% Elec:7%

January

Npower

Gas & Elec: 5.1%

February

E.On

Gas: 3% Elec: 9%

March

EDF

Gas: 6.5% Elec: 7.5%

August

Scottish Power

Gas: 19% Elec: 10%

British Gas

Gas: 18% Elec: 16%

September

Scottish & Southern

Gas: 18% Elec: 11%

E.On

Gas: 18% Elec: 11%

October

Npower

Gas: 15.7% Elec: 7.2%

November

EDF

Gas: 15.4% Elec: 4.5%

 

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  • rate this
    0

    Comment number 1000.

    RE 977.smartIgnoramus

    No I'm not sure.

    The point is sound though - be it retail business wasting energy or other businesses... my company wastes loads. Silly cow round the corner from me always leaves her monitor on when she leaves, has air con on whilst wearing her jumper, windows open with air con on, lights on when the Sun is out etc it's annoying

  • rate this
    +1

    Comment number 999.

    How many more poor, old and sick people will die this winter in the U.K.before this government Con/libdems start to stop the greedy power companys? putting up they prices as they see fit?or maybe the government has some kind of party finance deal with some of them?

  • rate this
    +1

    Comment number 998.

    The alleged "pledge" from the PM, and Chris Huhne's elaboration of it amounts to hot air. Nothing new is proposed. Consumers are urged to redouble their efforts to compare tariffs and switch suppliers, to accept free insulation deals, and pay by direct debit. Every one of these was being plugged nonstop over the past decade. The BBC is not there to help HMG talk its way out of the issue.

  • rate this
    +1

    Comment number 997.

    just signed the epetition it only takes a couple of minutes/

  • rate this
    +2

    Comment number 996.

    #982 C McK

    "Where would Scotland be ... Side by side with Greece holding out the begging bowl"

    You are so right! I think every Scot must thank God for the Act of Union.

  • rate this
    0

    Comment number 995.

    976. Total Mass Retain

    The minimal amounts you talk about and the minimal space here, prevents much discussion to a level worth having.

    Instead, I would remind people that Supermarkets are probably about the most cost-concious companies around, whose livelihood depends on eking out small profit from huge product sales.
    I suspect they have worked out that such storage is the most cost efficient

  • rate this
    0

    Comment number 994.

    Market? What market? It's the same gas or electricity whoever your provider is. Re-nationalise all of the utility companies now and doe away with all of this false, so-called competition!

  • rate this
    +3

    Comment number 993.

    lets not forget - The directors’ £16.1 million windfall that formed part of a £135million bonus pool shared by the firm’s workforce in March this year.
    Uk govt sold our utilities but the condition should have been that profits should be invested back into maintaining the infrastructure to deliver the utilities NOT dish out obscene bonuses.
    Wake up citizens, MARKETS only benefit a few!!!!

  • rate this
    +4

    Comment number 992.

    When I heard about this summit I had to laugh. The Tories are the free market party that believes this is the way things should work. They created the private energy business so they don't really want to tackle it, even if consumers are being exploited. This is just like the conference credit card goof up i.e. "sorry but you'll just have to be better at managing your pennies and wear more clothes"

  • rate this
    +3

    Comment number 991.

    We joined with NPower a year ago and the monthly direct debit they calculated wasn't sufficient to cover the cost. This quickly led to us owing a considerable amount, which we're now having to pay off in order to switch. I'd imagine there a number of people in this situation who cannot afford to pay off a lump sum and so cannot switch. It makes me wonder if this is a tactic to reduce switching.

  • rate this
    -1

    Comment number 990.

    All these people saying how they've become more energy-efficient in their households but the bills keep going up may wish to consider how many electronic gadgets they have plugged in constantly charging - laptop, speakers, printer, shredder, telephone, mobile phones, television, digi-box, DVD player, hi-fi, personal music players ...

    It all adds up.

  • rate this
    0

    Comment number 989.

    972. I am the one percent

    I think there is a party that advocates both of those policies. It has the word "National" in it and it isn't the "Scottish" version.

    That is why the three main parties tend to agree on largely free market economics and engagement with the rest of the world rather than playing to the populist gallery with policies that might win a few votes.

  • rate this
    +3

    Comment number 988.

    984
    yes your right signing an epetition is a good idea

  • rate this
    +3

    Comment number 987.

    The money wasted on the bureaucracies that enable the competition charade to operate would be better spent on something else surely? Then again it creates jobs, this so-called competition.

    One UK energy company charge the same price for billed direct debit or card meter customers- no gimmicks, look them up - they don't advertise.

    I have never needed to change provider!

  • rate this
    +4

    Comment number 986.

    Apparrently it's going to be one of the coldest winters for ages. Good luck everyone. We'll be wearing our scarves and overcoats inside and putting the heating on as and when we can afford it. Fortunately we're all quite healthy (at the moment) but pity those who aren't so lucky.

  • rate this
    +3

    Comment number 985.

    If only the previous Labour government hadn't enacted the Climate Change Act in 2008 and loaded all our energy bills with green taxes to pay for their legally binding renewable targets.

    Now who was the minister responsible? Ah, yes Mr Ed Miliband

  • rate this
    +2

    Comment number 984.

    Nearly 1000 people have made a commented.

    A lot of people are saying the gov are all talk and nothing will be done
    .
    It seems quite hypocritical given there are only 122 signatures on the e-petition: http://epetitions.direct.gov.uk/petitions/636

    We could all go on a consumer strike and not use any energy for a day, but we won’t even sign a petition.

    That is why we get taken for a ride.

  • rate this
    +5

    Comment number 983.

    it appears calling a politician a windbag is breaking the rules ? did you listen to chris hulme today.

  • rate this
    -4

    Comment number 982.

    Where would uk be if it were not for Scotland's oil?

    Side by side with Greece holding out the begging bowl.

    C McK

  • rate this
    -1

    Comment number 981.

    Scrap all renewable 'initiatives' as we have had massive rises in power bills as a result of the Power Suppliers having to pay for the 'lead-in' overpricing to investors for their contribution to the National Grid. BioFuels should be scrapped as well and the land put back to producing cheaper food. Electric cars are today no better than ones produced in 1895. That is progress?

 

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