Big Six energy firms are 'squeezing competition' - Business News - Business - The Independent

Big Six energy firms are 'squeezing competition'

 

The Big Six energy firms are “squeezing competition”, MPs were told today.

Stephen Fitzpatrick of independent supplier Ovo Energy told a Commons Select Committee: “In a competitive market, prices could be lower.”

“We’ve been in business three years now and the competitive environment has never been so poor,” Mr Fitzpatrick told the Energy and Climate Change Committee. “Confusion around energy prices and bills has made it difficult to for customers to find value.”

He accused the Big Six firms of selling energy at a loss to new customers in order to squeeze out competition.

Talking to The Independent after giving evidence, Mr Fitzpatrick explained: “In a competitive market you shouldn’t have huge price differentials.

“But if you look at Scottish Power there’s a gap of £300 between its cheapest deal and the average tariff.

“Npower and EDF also seem to have a large differential in prices while Sainsbury’s Energy – which is British Gas by another name – is also sold at a loss.”

MPs summoned bigwigs from the Big Six energy firms – British Gas, E.on, EDF, Npower, Scottish Power and SSE – to explain why the energy market is not working properly for UK consumers. The bosses of smaller rivals Ovo and Good Energy were also called to give evidence.

Energy bosses faced accusations that “The big six are functioning as an oligopoly that produces negative outcomes for British consumers”.

MPs said that the energy industry was “a failed market” while John Robertson, Labour MP for Glasgow North West, told energy chiefs that “The perception is you are money-grabbing so-and-sos and all you do is rip us off”.

Alistair Phillips-Davies, generation and supply director of SSE denied the charges and said: “There’s healthy competition in the market. We all act very differently.”

British Gas boss Phil Bentley said that the UK had “the lowest gas prices in Europe”.

But Mr Fitzpatrick told the Committee that UK consumers don’t care what their counterparts in Belgium or France pay.

“The fact that you can have two houses next to each other with one paying 25 per cent more than the other for their gas and electricity is one of the reasons that customers don’t trust energy companies,” he told The Independent.

Meanwhile MP John Robertson will tomorrow demand that energy regulator Ofgem acts to help people unfairly trapped in crippling energy tariffs.

In a speech to Parliament, he will say: “The cartel-like Big Six have too much power. By trapping disadvantaged customers into extortionate tariffs, they are proving once again that they need to be shown what it means to be fair and responsible.”

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