Government under fire for being soft on Big Six

 

Personal Finance Editor

The Government walked into a row yesterday after it “invited” Britain’s Big Six energy companies to hand customers a windfall they’ve pocketed through a deal made last December over official green levies.

That was not good enough for the Labour MP John Robertson, who sits on the Energy Select Committee, who demanded that energy firms repay the cash.

“I believe the energy companies have been conning us for years: raising prices while their profits soar,” said Mr Robertson. “They insist this isn’t true, so I challenge them to prove it. Their costs have gone down, so now their prices should as well.”

The gas and electricity suppliers have already been forced to hand back £50 to customers through lower bills under the terms of the deal, but could now hand back an estimated further £23 per customer.

The Government admitted yesterday that companies that signed up for the Energy Company Obligation (ECO) “are likely now to be in a position to make greater savings than they had originally projected in December.”

The obligation required suppliers to insulate homes and collect levies from households to fund the programme. But December’s deal reduced the number of homes that companies had to insulate, saving them millions.

Now the Government has been accused of pussy-footing around the issue rather than forcing firms to play fair with hard-up customers.

Buried in a consultation document published yesterday it said it “would expect the energy suppliers to ensure that consumers benefit from this further reduction... and invites them to set out publicly how they propose to do this.”

The £23-a-customer saving was estimated by the Insulated Render and Cladding Association. Andrew Warren, director of the Association for the Conservation of Energy, said: “Even though it concedes that the Big Six are receiving a further windfall this year directly as a result of the over-generous proposals, the Department for Energy and Climate Change has no intention of trying to claw back any of these windfall profits.

“Instead, they are simply ‘inviting’ them to make philanthropic gestures. Yet again, the end score is: Big energy companies, six; rest of the world, nil.”

Mr Robertson added: “Nobody trusts the energy barons. Here is a chance for them to regain some of that trust, by doing the right thing.”

A DECC spokesperson told The Independent: “As a direct result of changes to the ECO scheme confirmed today, we are reducing the costs of the scheme for suppliers in order that this reduces the impact on consumer bills. All the major energy suppliers have publicly committed to reduce consumer bills by around £30 to £35.”

She said DECC expects energy companies only to charge consumers the actual costs of delivering the ECO programme and added: “Although we’re not forcing them to do this, we have invited them to set out publicly how they propose to pass on savings to their customers.

“Any supplier who is not passing on the reductions is likely to be less competitive and customers can switch to a cheaper supplier. Additionally, those suppliers that do not fulfil this expectation will undoubtedly get picked up by the CMA investigation.” 

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