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
    -3

    Comment number 400.

    It is extremely difficult to compare privatised and nationalised energy industries in the UK as your only personal experience is based on a point in time and people tend to wear idealogical rose tinted glasses anyway.

    Whereas, if you look at Korea for guidance, the North is nationalised and the South is privatised. Be honest, which part of that country would you prefer to live in?

  • rate this
    +3

    Comment number 399.

    381 @thetropicalfish

    At least the high prices mean people use less and contribute less to the global warming which will eventually get us all. Every cloud and all that.
    *
    LOL, sorry but I think the extra cigars being smoked in a few weeks time by the directors of those privatised energy companies when they get their 'Fat Xmas Bonus' will probably cancel that out ;-)

  • rate this
    +3

    Comment number 398.

    Yet another PR exercise for the PM?
    Constant nonsensical headlines of David Cameron doing this or that completely meaningless - its the economy stupid! Go for growth and bin the disasterous austerity policy?

  • rate this
    +6

    Comment number 397.

    Mr Cameron doesnt have a clue. If he was serious which I doubt, he could always start up a uk gov energy company to undercut the competetors... oh of course I forget, we did have one, his predecessors sold it all off. Thats what we get for having a country run by shop keepers and bankers, they are always looking for a fast buck. Thats what needs to change, no more bankers or CEOs running uk ltd.

  • rate this
    +2

    Comment number 396.

    Measures should be in place to prevent energy companies imposing huge rises which few of us can afford. Whilst we all understand that companies have to make a profit it appears that the main reason for the huge increases is to pay high salaries and bonuses. We in Britain are squeezed to the limit and beyond.

  • rate this
    0

    Comment number 395.

    he c9ould cut V A T on domestic fuels .and review wind turbines ,are they value for money ?

  • rate this
    -3

    Comment number 394.

    Energy prices are still too low. We are still burning too much fossil fuel, and there is consequent trouble ahead.

    Don't whinge about the price of gas. Put on woolies, and turn down the thermostat.

  • rate this
    +6

    Comment number 393.

    Maybe this isn't going to appeal to some.. but the facts are that Gas (and other fossil fuels) is becoming unaffordable to the common man all over the world. New wealth in emerging economies and an ever rising world population are only going to send the cost one way. We need energy independance through investing in renewables and nuclear. It's the only viable option for the future.

  • rate this
    +2

    Comment number 392.

    So the energy companies are playing a game, let's look at things like they are properly, the energy companies are out to make as much money as they can, they do not give a damn about the likes of you & me, & for that matter nor does the government.

    They are only acting because they are being forced to do so because high energy prices are now crippling the economy which we all play our part in!

  • rate this
    +10

    Comment number 391.

    Lets have transpaency on the Green Tax on our bills to pay for all the wind turbines being erected. I think consumers will be surprised at the amount this is. I have no land so cannot erect a turbine. My property faces wrong way so cannot have PV panels yet i am paying in taxes for the very generous subsidies to anyone fortunate to have land and suitable roof space.

  • rate this
    -3

    Comment number 390.

    385.bombus
    "The nationalised energy companies always paid their way?And they were never held to ransom by unions either".
    You can't have been around in the seventies when we had power cuts all the time because of work to rule and union demands.

  • rate this
    +10

    Comment number 389.

    357.
    kaybraes
    When did a nationalised industry ever pay it's way ? When the power companies were state owned, the punter was continually blackmailed into higher prices by the unions.
    **Utter rubbish. 30yrs ago the % of income I paid for energy was a fraction of now. In the last 10yrs by spending £000s I have cut elec by 60% but bill is up by 110%. Plus far worse service. Private sector?

  • rate this
    +3

    Comment number 388.

    Without giving Offgen some Real teeth there is little the Government can do to limit prices.

    Oh Cameron & Co can waffle and spin but actually bringing down the price on Your bill its not going to happen in any real sense.

    Higher fuel prices are a result of China and India's economic expansion with no compensatory expansion in production of oil and gas. Its global market out there.

  • rate this
    +1

    Comment number 387.

    365.Marion Monahan
    It's all well and good encouraging people to get out more - but what about those not able to get out without assitance? Plus who wants to be out and about on a cold dark night?!

    I am paying out the nose for my rent, so if I want to enjoy my flat - I shouldn't be penalised by over inflated gas and electricity prices.

  • rate this
    +3

    Comment number 386.

    How many people think it's time to stop talking and start taking concrete action to stop the public being ripped off any longer. £1.38 for one litre of petrol - that alone should have been enough to motivate people to do something. If hundreds of thousands of people stopped paying their fuel bills we'd see some change really fast.

  • rate this
    +6

    Comment number 385.

    @ Kaybraes
    What are you on about? The nationalised energy companies always paid their way? As did British Telecom and the Water Board for that matter. And they were never held to ransom by unions either. Your memory seems defective.

  • rate this
    0

    Comment number 384.

    UK power 2000MW plants were designed for a 20-25 year life. Most are still operating after 40 plus years, the oldest Ferrybridge C is 46. These & plants will shortly close around 2015 leaving a deficit of firm reliable generation. We either pay for their replacement as taxpayers (nationalisation) or consumers (privatisation). It will probably be both.

  • rate this
    +1

    Comment number 383.

    I continue to hope that ITER might get past its problems, and that I might see the reality of fusion technology before I die (I'm still young yet). If it could be made to work then we would have pretty much limitless and almost free energy for all.

  • rate this
    +8

    Comment number 382.

    You have to laugh at the Cons.It was them that caused this crisis in the first place because of their ideology.They allowed the energy companys to run riot with costs by putting it all out to private hands under Major.Do you think that Cameron will force down prices.It would affect his dividends on his shares in the energy companys.I dont think so.How many Cons would complain of low divi payouts!

  • rate this
    -3

    Comment number 381.

    At least the high prices mean people use less and contribute less to the global warming which will eventually get us all. Every cloud and all that.

 

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