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
    +5

    Comment number 380.

    The only REAL competition would be to put a nationalised company into the market.
    This would make it impossible for those private sector cowboys to rip us off because everyone would flock to that nationalised supplier when the private sector gets greedy.

    The only thing which can stop true competition happening is...the government you all voted for!

    Turkeys voting for Christmas, lol

  • rate this
    +15

    Comment number 379.

    Blame Thatcher's old habit of 'selling off the family silver' in order to fund temporary tax cuts for the rich.

    At the time, the public at large were too distracted by the chance of a making a small profit on shares to complain, which was exactly what she planned.

    Her mantra that a 'Free Market ensures consumers get the best deal' was always rubbish & we are still paying for those tax cuts now.

  • rate this
    +2

    Comment number 378.

    362.AJS
    3 Minutes ago
    The only way to cut your bills is to invest in renewables -- solar panels and wood fired heating.

    Not strictly true.We installed airco, most are now heat pump inverters too.This week it has been happily blowing out about 2.8kw warmth for 160w input.The exterior ambient was5oC. For relatively cheap capital cost too.Surprised they are not more widly used.

  • rate this
    +2

    Comment number 377.

    This Govt is shamefully trying to have it both ways. If it thinks price intervention doesn't work, it shouldn't try to give the impression that it can help the consumer directly. It believes that only competition will keep prices down. But that's not succeeding. If it tries to tweak existing arrangements it won't work. A new, industry-proof, competition regime would take a very long time

  • rate this
    -1

    Comment number 376.

    The simplest solution for bringing down energy bills:

    long johns.

  • rate this
    +16

    Comment number 375.

    365.
    Marion Monahan"The one good thing about expensive fuel is that is forces people to use less of it"

    No dear eco person , it forces poorer people to use less of it.

  • rate this
    +1

    Comment number 374.

    No they won't put up prices because they already have!

    The energy companies must think we are all stupid, is it not strange how in recent times when prices fall they do it at the end of the winter to stert in the summer, then they put up prices by way more in June-July just in time you guessed it for the winter. I use about £10 in gas in the summer & £750 winter, Cont...

  • rate this
    +5

    Comment number 373.

    more profiteering from the companies and does anyone wonder why we have protests in the western capitalist societies now. it is just blatant riping off of consumers.

  • rate this
    +5

    Comment number 372.

    The only competition we have seen in the energy markets is the companies competing to increase their profits. If everyone went onto the lowest tariff that would increase dramatically as well. Don't be fooled by the wholesale cost argument - many energy companies supply themselves. A freeze for this year? wow only 3 months to go and it takes that long to transfer suppliers.
    We are being stitched up

  • rate this
    +6

    Comment number 371.

    Rather than getting caught up with British Gas only making about 50 quid profit per customer debate, why not look at how much Centrica is making?

  • rate this
    0

    Comment number 370.

    Surely the current North Sea Oil & Gas Production Tax (62%-80%) is a big factor in the pricing of retail energy - apart from the additional cost to the producers it discourages production and development, causing an imbalance in the supply/demand equation. A reduction in this government profiteering would possibly be a good place to start?

  • rate this
    +6

    Comment number 369.

    Prices of particular commoditys are targetted by "investors", these commoditys are those that are a basic human requirement, heat & light & food produce.
    Unlike most other commoditys investors are guaranteed constant & growing demand.
    As world unsustainable population grows whether they want cars & Iphones doesnt matter, they need heat & food.
    Pirate mentality investors have to be STOPPED

  • rate this
    +66

    Comment number 368.

    As a household we have become evermore efficient in how and when we use energy and still my monthly direct debit continues to rise. We also have a 2.5kW PV system worth a £5 DD reduction according to SP. The price structures are all front loaded, the first few hundred kWh's are the most expensive, the more you use the cheaper it gets. This needs reversing so you are rewarded for efficiency.

  • rate this
    +1

    Comment number 367.

    "Then, the managing director of British Gas was invited on to say that “unless someone discovers huge amounts of gas and imports it into the UK…”. And, bafflingly, no-one mentioned the small fact that one of BG’s rivals recently discovered 200 trillion cubic feet of gas near Blackpool."

    http://www.spectator.co.uk/coffeehouse/7318578/the-poverty-of-britains-energy-debate.thtml

  • rate this
    +5

    Comment number 366.

    I am with EDF, & an oap (my only income).
    I believe there is much "waste"today, & everyone must realise & "conserve" - especially energy!
    EDF hv sent me mail, breaking down their increase %wise, incl "20% Admin fee"! thats far too high! Can you pls investigate their "breakdown of costs" which is given in the postal package they send consumers.
    Thankyou very much.
    sincerely
    Carol H.

  • rate this
    -3

    Comment number 365.

    We all need to spend more time outdoors and not have the heating on when we are out. The one good thing about expensive fuel is that is forces people to use less of it .This is good for the environment and should help halt the accelerated climate change which could see GB with temperatures like Sweden in the winter slow down.

  • rate this
    +3

    Comment number 364.

    These companies are doing what their investors expect them to do - make money. What did the Government expect would happen when they sold them off? That they would be run as non-profit making? It was only ever a matter of time before corporate greed kicked in...

  • rate this
    +3

    Comment number 363.

    I think the only way to sort out these excessively high energy bills is for the government to nationalise the companies again.

  • rate this
    0

    Comment number 362.

    The "competitive market" for electricity and gas is completely fake because all companies sell *exactly* the same product with *no* difference. And energy is never, ever going to get any cheaper as long as we continue to rely on fossil fuels which are running out.

    The only way to cut your bills is to invest in renewables -- solar panels and wood fired heating.

  • rate this
    +6

    Comment number 361.

    I can't help thinking that the British Public are now getting what they deserve. What on earth did you expect when these utilities were privatized? They now operate to generate profits for shareholders, not to service the needs of the British People. If you want cheaper energy bills the energy supply must be re-nationalized. If you don't want that, stop complaining.

 

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