MPs warn of more fuel price risesUK energy marget needs 'urgent reform'

29 July 2008

A blue flame from a gas hob

Although there is no 'green gas', you can still switch your energy supplier to a green tariff

Householders have been warned to brace themselves for significant rises in electricity and gas bills which will have serious consequences for millions of consumers.

A committee of MPs has voiced concerns that the UK’s energy markets need urgent reform.

The report from the business and enterprise select committee says the government also needs to undertake a ‘fundamental rethink’ of its fuel poverty policy.

But the committee said it had found no evidence of collusion between the ‘big six’ energy companies - British Gas, Eon, Scottish Power, Scottish & Southern, EDF, and Npower.

Doorstep sales

However, it said there were ‘very real problems’ with the market.

Committee chairman Peter Luff said: ‘Just because we have found no evidence of collusion does not mean we have given the big six energy companies a clean bill of health - far from it.

‘It is clear that there are very real problems in the energy markets at all levels, and going beyond these six companies, which need to be addressed.

‘Some of these are strategic issues such as the functioning of wholesale markets, while others are more specific concerns, for example, how suppliers conduct their doorstep sales to encourage switching.’

Bill hikes

The report predicts that domestic gas and electricity bills ‘will rise significantly in the near future, over and above the increases already announced this year’.

The committee raised concerns that fuel poverty programmes had failed to help most of those who were struggling.

It also recommends that regulator Ofgem carry out an urgent investigation into wholesale gas prices as part of its wider probe into the energy market.

Switch with Which?

Duncan Sedgwick, chief executive of the Energy Retail Association, said companies needed the freedom to innovate and invest for the longer term, and the government should produce clear energy policies.

An independent report commissioned by British Gas owner Centrica earlier this month warned that prices could increase by 70%.

Customers who want to see how much they could save by switching to a different supplier should go to the Switch with Which? site.

Alternatively, call the Switch with Which? freephone helpline on 0800 533 011. It is open 8.30am to 6pm Monday to Friday, and 9am to 1pm on Saturday.