Scottish Power savings claim probed by watchdog

The energy watchdog said today that it had launched an investigation into a "potentially misleading" offer by Scottish Power promoted during its last price hike.

Ofgem, which is pressing ahead with a proposed shake-up of the industry, said it will look at Scottish Power's £459 savings claim from its "Direct October 2012" offer.

The energy supplier unveiled the offer earlier this month when it said gas tariffs will rise by an average of 19% from August 1 and electricity will go up by 10%.

Earlier this year, the regulator threatened the "big six" with a referral to the Competition Commission if they did not simplify prices and sell off between 10% and 20% of their electricity output to allow smaller firms to enter the market.

Under the Scottish Power Direct October 2012 Offer, the company guaranteed prices would remain a minimum of 1% per year below its standard monthly direct debit gas and electricity prices until September 30, 2012.

But discussing the product, Alistair Buchanan, chief executive of Ofgem, told the BBC that "when you look at the small print it looks very different from that".

He said: "We have been looking at their marketing material in particular, and under our consumer protection powers we are very concerned about some of the claims they have made and so we will be having a look at that very carefully."

Ofgem stressed that an investigation being launched did not mean Scottish Power had breached its obligations.

Scottish Power is also under investigation over its pricing plans and, along with three other providers, into potential mis-selling of energy to customers.

Mr Buchanan said during its review of the energy market it struggled to see where up to £700 million of the £2.9 billion in profits generated by the industry came from.

He said the "big six" - British Gas, Npower, E.ON Energy, EDF Energy, Scottish Power and Scottish and Southern Energy - were engaging in the reform process.

The watchdog said it had received support for its proposed reforms for the wider industry from Consumer Focus, Which? and the Citizen's Advice Bureau.

Ofgem wants to "sweep away" complex tariffs so consumers can understand prices more easily and wants to "break the stranglehold" the big six energy firms have on the market.

The regulator hopes to publish full proposals for its reforms next year after consultation with interested parties, including suppliers.

Mr Buchanan said Ofgem found that over the last five years profits for the big six had remained "more or less the same" - just below £3 billion on aggregate.

He said: "We watch that quite carefully because of course, on the one hand, the companies, they say, 'we are losing money in a certain part of the energy chain' but it would appear, given that their overall profits stay at much the same level, that they regain profits elsewhere."

Mr Buchanan said Ofgem had appointed an independent official accountant look at the industry books.

Michael O'Connor, chief executive of Consumer Focus, said: "Energy suppliers have been in denial about their poor reputation, the health of the market, and scale of change needed to put it right. This market needs to change. Ofgem has taken another step today and we welcome it."







A Scottish Power spokesman said: "We agree that information about all energy tariffs across the market should be as clear as possible and we will fully co-operate with the Ofgem investigation.



"The tariff in question was a very limited offer with considerably discounted prices, which is now fully subscribed.



"However, there are a number of similar products still available on the market from competitors. We believe that all figures that have been quoted by us are accurate."

Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
Sport
Yaya Touré has defended his posturing over his future at Manchester City
Voices
Spectators photograph the Tour de France riders as they make their way through the Yorkshire countryside
voicesHoward Jacobson: Line the streets for a cycling race? You might just as well watch a swarm of wasps
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
lifeHere's one answer to an inquisitive Reddit user's question
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
News
Detail of the dress made entirely of loom bands
news
Life and Style
beauty
Sport
There were mass celebrations across Argentina as the country's national team reached their first World Cup final for 24 years
transfersOne of the men to suffer cardiac arrest was 16 years old
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Sport
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
News
A mugshot of Ian Watkins released by South Wales Police following his guilty pleas
peopleBandmates open up about abuse
Sport
Basketball superstar LeBron James gets into his stride for the Cleveland Cavaliers
sportNBA superstar announces decision to return to Cleveland Cavaliers
Sport
Javier Mascherano of Argentina tackles Arjen Robben of the Netherlands as he attempts a shot
world cup 2014
Sport
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
News
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
people
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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

C# Developer (HTML5, JavaScript, ASP.NET, Mathematics, Entity)

£30000 - £45000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Integration Developer (.NET, Tibco EMS, SQL 2008/2012, XML)

£60000 - £80000 per annum + Benefits + Bonus: Harrington Starr: C# Integration...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice