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
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
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

Recruitment Genius: In House Graphic Designer

Negotiable: Recruitment Genius: An In-house Graphic Designer is required to wo...

Recruitment Genius: Technical Service Engineer - Vehicles

£25000 - £65000 per annum: Recruitment Genius: One of the UK's premier supplie...

Recruitment Genius: Home Care / Support Workers

£7 - £10 per hour: Recruitment Genius: This care provider is looking for Home ...

Recruitment Genius: Web Team Leader

£30000 - £35000 per annum: Recruitment Genius: One of the UK's leading web des...

Day In a Page

Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate