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
    +2

    Comment number 920.

    We vote for one lunatic (Cameron) after another (Blair) after another (Thatcher) in this country.

    What the hell do you expect ? It's all gone down the toilet and still the great British public persist in their ludicrous faith in the two-and-a-quarter party system.

    Want change ? Vote for someone else !!!

  • rate this
    +1

    Comment number 919.

    911.Artisan engineer
    'Don't worry not a single Tory MP will go cold they will just claim the extra cost in their expenses'

    More selective memory issues on here -

    Politicians of all parties claimed for things that they were not entitled to so why limit your accusations to the Tories ??

    Until people start to see the basic problems with parliament in general we cannot move forward.

  • rate this
    +3

    Comment number 918.

    750.
    Vermillion Zero
    2 Hours ago

    739.Colin2108

    The real answer is NATIONALIZATION

    + +

    True. . . . Thatcher was desperate for some cash, privatisation looked good - but she never thought through the ultimate cost to us.

    Quote: "she never thought through the ultimate cost to us".
    "Us?" That I very much doubt! She would have made sure she looked after her own; remember Council House sales?

  • rate this
    +2

    Comment number 917.

    Whatever happened to North sea oil? Wasn't that supposed to make us completely self-sufficient for all our energy needs? Did the politicians in the 60's and 70's lie to us?

  • rate this
    +1

    Comment number 916.

    So according to Cameron & Huhne
    "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,"
    How about bringing all power supplies back into public ownership - yes that does mean 'nationalisation'. Then we can pay the people who run things sensible wages & nothing to shareholders or profits.

  • rate this
    +1

    Comment number 915.

    The Gvmt can't do anything. Privatization put paid to that.

    The companies can charge fees if you switch suppliers, don't tell you all the facts when you change and have merged gas and electricity bills to hide the amount you owe under fluctuating gas usage.

    Many folks can't understand the bills and companies don't want them to.

    Suppliers are within the rules which should be changed.

  • rate this
    +2

    Comment number 914.

    Alas, Quantitative Easing increases inflation. Even if the government succeeds in limiting energy price increases, expect increases in bills of 5% per annum due to the Government's economic policy alone.

    Bad news if your income does not keep pace with inflation.

  • rate this
    +1

    Comment number 913.

    My combined gas and electric monthly debit has increased by 51.9% since May 2007. We have not increased our energy consumption and have bought newer more energy efficient appliances.
    I keep a close eye on the energy companies deals and tariffs and feel at the moment we have one of the best on offer.

  • rate this
    0

    Comment number 912.

    If the prices go up, the weak and poor will have no power and will die.

    If they stay down we'll use more power than is available, bringing power cuts. In that case the weak will die even if they are rich. At least that brings a kind of equality!

    We need huge incentives for nuclear, wind and solar power to increase electricity supplies, then competition will see to price reductions all round.

  • rate this
    0

    Comment number 911.

    It is time to rediscover coal and coal gas and become energy self-sufficient . The new methods to extract and use supper fine coal powder is the way ahead.

    Thanks to the great Maggie T sell off we are all now paying twice for the last Tory sell of. Don't worry not a single Tory MP will go cold they will just claim the extra cost in their expenses.

  • rate this
    +2

    Comment number 910.

    This government is all talk and no action. The energy companies will walk all over them just as the banks have already done.

  • Comment number 909.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 908.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 907.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 906.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +1

    Comment number 905.

    RE 898.Laatab

    - are you awake then? what are you doing about it?

  • rate this
    0

    Comment number 904.

    all these calls for investment into the traditional forms of renewable energy are a waste of time. when fusion power arrives there will be virtually unlimited, cheap, reliable, safe, clean energy for the entire planet.
    this is the only current viable replacement for the current fossil fuels, stop wasting time on anything else! you're never going to power the planet with these ridiculous wind farms

  • rate this
    +2

    Comment number 903.

    Am I the only one staring at the barn wall thinking "I'm sure that's not what it used to say."
    I could swear that in 1987 it said that privatization would get rid of the inefficiency that was making my bills 20% higher than they should be.
    To me it seems a bit pointless to put all those people on the dole and still have the high bills. Maybe that's why I never made it into Thatcher's think tanks.

  • rate this
    +1

    Comment number 902.

    Why would Government bother too much about reducing the price of gas and electricity to the poeople of this Nation when VAT is allied to its cost ? Is it not the same tale with the cost of petrol and diesel for our transport. and so forth ?

    After all there is the cost of the London Civil Service to fork out for , wars to wage , welfare to be doled out to the unemployed

  • rate this
    +3

    Comment number 901.

    Don't know what is worse, the price of these energy bills.

    Or some of the people actually arguing, in a comments section, on the news.

    Understand the odd comment to another person, but to actually argue with each other and try to be-little each other. I think that's a new low.

 

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