Big Six energy firms face full competition probe

Review warns of rising profits with no clear evidence of suppliers reducing their own costs or becoming better at meeting customer expectations

Personal Finance Editor

The Energy Watchdog Ofgem has today effectively admitted that the gas and electricity suppliers are out of control by referring the energy market to the Competition and Markets Authority (CMA) for a full investigation.

It recently carried out an assessment of the energy market, along with the now-defunct Office of Fair Trading and CMA, which concluded that competition isn’t working as well as it should for consumers.

The review revealed increasing distrust of energy suppliers, uncertainty about the relationship between the supply businesses and the generation arms of the six largest suppliers, and rising profits with no clear evidence of suppliers reducing their own costs or becoming better at meeting customer expectations.

In other words we’re fed up with soaring bills and more families being pushed into fuel poverty while the energy giants trouser ever-booming profits.

Announcing the referral this morning, Ofgem chief Dermot Nolan said: “Now is the right time to refer the energy market to the CMA for the benefit of consumers. There is near-unanimous support for a referral and the CMA investigation offers an important opportunity to clear the air.”

Campaigners have demanded a full explanation of why the cost of heating and lighting our homes has risen so rapidly while the Big Six energy giants have been pocketing record profits. Complaints about energy companies have rocketed, reaching a staggering 5.6m last year as customers queued up to moan about bills, meters, service and payments.

One proposal is for the Big Six energy companies to be split up, with their supply and generation businesses separated. That would, at a stroke, reduce concerns that they could be manipulating prices to their own advantage.

Richard Lloyd of Which? said: “This is a watershed moment for the broken energy market and millions of people struggling to cope with spiralling bills. The investigation must leave no stone unturned in establishing the truth behind energy prices, and while it takes place Ofgem must continue its renewed, tougher approach to protecting consumers. Energy companies must also not wait for the outcome of this inquiry but make urgent changes now to do better by their customers.

“We need to see radical reforms that will inject more competition into the market and help rebuild trust by giving consumers confidence that the price they are paying is fair.”

John Robertson MP, who sits on the Energy select committee, said: “If they are found guilty, the tens of millions in fines should go straight back into the pockets of consumers who have been ripped off all these years. It is time to stop fat cat energy barons raking in profits through ripping off their customers.”

“My faith in Ofgem has hit rock bottom. The companies have making these eye-watering profits for years and Ofgem are only now saying they are excessive. They should have pulled their finger out a long time ago and I hope now they will do their job properly and scrutinise what is actually going on.”

PROMOTED VIDEO
Arts and Entertainment
Stik on the crane as he completed the mural
art
News
Happy in his hat: Pharrell Williams
people
News
i100(More than you think)
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
Arts and Entertainment
John Hurt will voice Prince Bolkonsky in Radio 4's War and Peace
radioRadio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?