All in it together? Big Six energy chiefs feel heat from MPs

Representatives from Big Six accused of behaving like a 'chorus line acting in concert' as they attempt to justify recent price hikes

The Big Six energy firms were accused of behaving like a “chorus line acting in concert” as they closed ranks in the Commons to justify rises in gas and electricity prices of around ten per cent.

They blamed the sharp increases on green taxes, transport costs and surging wholesale prices, defended their profits and insisted they sympathised with families struggling to pay bills.

But the consensus was broken when a small company trying to break into the market claimed the Big Six sought to charge customers the “maximum they feel they can get away with”.

Executives from the six firms, which have been accused of acting like a cartel over prices, insisted they behaved responsibly, were committed to transparency over charges and blamed their unpopularity on their failure to get their message across properly.

They denied cross-subsidising their businesses and argued that they were investing billions of pounds in British industry.

But the Labour leader Ed Miliband, who has called for an price freeze while the energy market is reformed, condemned the “list of excuses” from the companies. He said: “What we need is action, action against companies that are overcharging people and taking advantage of a broken market.”

The companies presented their common front during a three-hour hearing of the Commons energy and climate change select committee in which they were repeatedly challenged over their business practices.

The Conservative MP Phillip Lee asked the executives whether they had hired public relations companies ahead of their appearance. He told them: “There is a suspicion that you are a chorus line acting in concert.”

John Robertson, a Labour MP, voiced the same frustration, saying: “You have pretty agreed on everything.”

Tony Cocker of E.ON, the only chief executive to attend, called for a Competition Commission investigation to demonstrate they were not acting as a cartel.

William Morris, the managing director of SSE, which has announced an 8.2 per cent rise, said he regretted having to increase bills for customers, who were “struggling to maintain their budgets”.

He explained that environmental schemes had added 13 per cent to charges and called for the costs to be switched from bills to general taxation.

Guy Johnson, external affairs director of Npower, which has announced average rises of 10.4 per cent, said the largest driver of increases had been the cost of the so-called climate obligation on power firms.

But Stephen Fitzpatrick, the managing director of small-scale competitor Ovo, claimed loyal bill-payers are charged are a far higher rate, in some cases £200 more, and loaded with environmental costs than consumers who switch.

He said:“It looks to me like a lot of energy companies, a significant number of the Big Six, are charging the maximum price they feel they can get away with to the customers that they feel will not switch under any circumstances and then maintaining the illusion of competitive pricing with tariffs targeted towards a very small number of relatively well-engaged customers.”

He accused British Gas of being the “most active” in terms of running a dedicated “win-back team” whose sole job was to call up customers that were leaving to say “now we can cut your bill”.

British Gas, which recorded a £1bn-plus profit last year, was challenged by the Labour MP Albert Owen over the 38 per cent increase in prices over the last five years.

He compared it with the 36 per cent increase to £2.35m in the salary of the chief executive of its parent company, Centrica, over the same period.

Ian Peters, managing director of energy at British Gas, said his company “agonised” over the latest price rises  because it was  “acutely aware” of the pressures facing customers.

He said executive bonuses in the company were determined by a remuneration committee based on long-term performance.

Asked whether energy bosses were comfortable taking bonuses when bills were rising, Neil Clitheroe of Scottish Power replied: “I'm not comfortable with what's happening to my customers. If we don't deliver then we don't get our bonuses.”

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
News
people
News
20. Larry Page: Net worth: $23 billion; Country: U.S; Source of wealth: Google
business
Life and Style
tech
Arts and Entertainment
A collection of 30 Banksy prints at Bonhams auction house in London
art
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 General

Tradewind Recruitment: Science Teacher

£90 - £140 per day: Tradewind Recruitment: I am currently working in partnersh...

Recruitment Genius: Doctors - Dubai - High "Tax Free" Earnings

£96000 - £200000 per annum: Recruitment Genius: Looking for a better earning p...

Recruitment Genius: PHP Developer

£32000 - £36000 per annum: Recruitment Genius: A rapidly expanding company in ...

Recruitment Genius: PA

Negotiable: Recruitment Genius: A PA is required to join a leading provider of...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness