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
Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
footballShirt then goes on sale on Gumtree
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
Have you tried new the Independent Digital Edition apps?
ebookA unique anthology of reporting and analysis of a crucial period of history
A poster by Durham Constabulary
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
Emily McDowell Card that reads:
artCancer survivor Emily McDowell kicks back at the clichés
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvBadalamenti on board for third series
Life and Style
Standing room only: the terraces at Villa Park in 1935
Ben Stokes celebrates with his team mates after bowling Brendon McCullum
sportEngland vs New Zealand report
Amal Clooney has joined the legal team defending 'The Hooden Men'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine