UK Politics

Chris Huhne pledges to 'get tough' over energy prices

  • 20 September 2011
  • From the section UK Politics
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Energy Secretary Chris Huhne has said he is determined to "get tough" with the six biggest energy companies, in his speech to the Lib Dem conference.

He said he wanted to help people save money by making it easier to spot cheaper deals and switch providers.

And he denied telling a newspaper that consumers were too lazy to shop around for lower prices.

Labour accused Mr Huhne of "standing idly by while energy companies raise their prices way above inflation".

The energy secretary said the government wanted to see "simpler tariffs" and a system in which firms were required "to tell you whether you could buy more cheaply on another tariff".

He did not give details of exactly how firms would be forced to change their practices, but did discuss beefing up Ofgem's regulatory powers.

'Consumer charities'

Mr Huhne has faced criticism after he was quoted by the Times newspaper as saying consumers "do not bother" to hunt for better deals on electricity and gas, and spent more time shopping for "£25 toaster" than an energy supplier.

But the minister told the conference in Birmingham: "Contrary to the Times' report, I neither said nor meant that this was laziness.

"It is just that consumers still think that they face the same bill whoever they go to."

As well as promising to take action against the "big six" energy companies - British Gas, Scottish Power, Scottish and Southern, Npower, E.On and EDF - Mr Huhne said he wanted to encourage new, small firms to enter the energy market.

He also said he wanted to see "consumer-friendly" organisations - co-ops, partnerships, consumer charities - dedicated to doing the shopping around for consumers "to make sure that you are always on the best deal, even if you do not have time to check yourself".

Ofgem already has powers to fine companies up to 10% of their annual turnover, but Mr Huhne said it should get new powers to make firms compensate customers when there had been "bad behaviour" - such as breaching licence conditions.

Other plans include stopping delays to Ofgem rulings by giving firms a right of appeal - rather than allowing them to refer rulings to the Competition Commission, which can hold up the process.

And he criticised those firms which kept prices high for millions of existing customers while offering cut-price deals online to attract new business and deter potential competitors from setting up.

"That looks to me like predatory pricing. It must and will stop," he said.

Energy UK - which represents the big six firms - said Britain had one of the most competitive energy markets in the world, with the cheapest gas and the fourth cheapest electricity of all major European countries.

"The industry supports measures that will encourage people to make sure they are getting the best out of it by shopping around for the best deal," director Christine McGourty said.

"People can save hundreds of pounds by shopping around, and there are also substantial savings with energy efficiency measures, such as insulation."

'Radical reform'

For Labour, shadow energy secretary Meg Hillier dismissed Mr Huhne's pledges as "tinkering".

"His own plans to reform the energy market do nothing of the sort and will exclude many potential new entrants," she said.

"Labour called for more competition in the market months ago and for a competition commission enquiry. Chris Huhne is fiddling with an already broken system. Labour is calling for radical reform."

John Cridland, CBI director general, welcomed help for consumers, but said high energy prices also partly reflected "the critical need for energy investment for a low-carbon future".

And he added: "We do need ministers to be crystal clear on energy policy if vital business investment is to be secured."

Friends of the Earth energy campaigner Donna Hume said Mr Huhne's "fighting talk" must be matched with action.

"It's right that people should be able to switch tariffs and companies more easily, but this won't ease householders' pain in the long run, with all six major energy firms putting up prices and the cost of gas rocketing," she said.

"Behind closed doors, the energy companies are attempting to lock us into expensive gas power plants for the next two decades instead of investing in the home-grown clean energy that could keep our bills stable and cheaper in the long run."

Ms Hume also criticised the government for cutting the feed-in-tariff support scheme which pays businesses and homes which generate their own clean energy if they also contribute some to the National Grid.

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