Competition 'could increase fuel bills': Consumer council wants inquiry into possible effects

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The Independent Online
MORE competition in gas and electricity may result in higher prices, the National Consumer Council fears.

Lady Wilcox, the council's chairman, yesterday called on the Government to protect consumers' interests in the energy markets and examine in full the possible effects of more competition.

Addressing a London conference, Lady Wilcox said the council was not against more competition per se, but she added: 'We are saying that the case so far is not proven. Any radical changes to the structure of energy supply must be accompanied by full analyses of the costs and the benefits such changes will bring - especially their effect on domestic customers.'

Privatisation had created a 'black hole' at the heart of energy policy. 'Unless the Government takes the lead, consumers' interests will be sucked into this Bermuda Triangle at the heart of policy- making on energy,' she said.

Her remarks come as the Government prepares to respond to the Monopolies and Mergers Commission's report on British Gas. It recommends that the company divests its gas trading arm but that full competition in domestic gas supply is delayed for almost a decade.

Independent gas suppliers, including North Sea companies, are lobbying for much earlier competition, saying prices will be lower and standards of service maintained. However, British Gas says the result is likely to be higher bills.

Lady Wilcox also accused the MMC of 'Alice in Wonderland logic' because it recommended a relaxation in British Gas price control to compensate the company for loss of market share in the industrial and commercial market. She said small consumers were paying for the privilege of larger customers being able to choose their supplier.

Earlier Tim Eggar, the energy minister, rejected allegations that there was no energy policy in the UK. He said the Government's stated policy was to ensure diverse energy supplies and keen prices through the competitive markets. The Government's role was not to interfere in the market but to set a fair and stable framework.

Mr Eggar added: 'The proponents of that view (that we have no policy) must themselves be lost in some time warp because they appear unable to view energy policy in terms other than the collectivist, the centrally planned and the interventionist.'