Ed Davey challenges Big Six with energy market review and promises '24-hour switching'

Government announces package of reforms to and vows make energy giants change

The Government has vowed to take on the so-called ‘Big Six’ energy companies and “put consumers in control”, as Energy Secretary Ed Davey appeared before MPs to unveil a range of reforms to the gas and electricity markets.

The biggest pledge he made was to make switching provider much quicker – down to 24 hours from the five weeks it currently takes.

The firms will also face a new probe into their accounts and the prospect of criminal sanctions where they are found to have fixed markets. They have recently been accused of using multiple branches of the same business to buy fuel from themselves at inflated prices – allegations which became a key point at the grilling of bosses by MPs this week.

Four of the Big Six companies have announced price hikes in recent weeks of around 9 per cent, despite reports from the industry regulator Ofgem which say wholesale prices have only gone up around 1.7 per cent.

The issue of what to do about energy bills has also become a major political football, amid an ongoing row between the Government and Labour on how best to rein in the firms and get a fair deal for customers.

Mr Davey said his department will be consulting on introducing criminal sanctions for anyone manipulating the energy markets.

And he called for a change to the way consumers change from one company to another – warning the firms not to use it as yet another excuse to raise bills.

“I am challenging the industry to deliver faster switching,” he told MPs in the Commons today.

“If you can change your broadband provider with a few clicks of the mouse why shouldn't you be able to do the same with your gas or electric?

“It shouldn't take five weeks for the change to take effect - 24-hour switching is my ambition.”

Ofgem’s reforms include changes to make it easier for customers to get the information they need to switch, Mr Davey said, and 500 volunteers will be trained up to work with vulnerable people to get them the best deal.

“Energy companies need to know that any wrongdoing will be uncovered and dealt with,” he said. “That's why the regulators are going to carry out annual competition reviews, to make sure the energy market is operating properly.

“We are going to consult on increasing the sanctions for manipulation of the energy markets, so that they carry criminal penalties for the first time.”

Not everyone was overly pleased with the announcement, however. Labour leader Ed Miliband, who has pledged a 20-month energy bill freeze if Labour wins the 2015 general election, dismissed the review.

And the shadow Energy Secretary Caroline Flint said: “We don't need another review, we need action - action to freeze people's energy bills and fix this broken market.”

Which? executive director Richard Lloyd, said: “There will be no great applause from the millions of consumers worrying about rising energy costs for the Government committing to make the regulators simply do their job.”

Gillian Guy, chief executive of Citizens Advice, was slightly more positive, saying: “The Government's announcements today will make switching faster, but it also needs to be easier. The most radical thing in this statement is the potential to force energy companies to pass key data to third parties like switching sites.

“At Citizens Advice we want to see a personal shopping service for energy customers. Using energy data, customers could ask switching sites to compare their bills and find the cheapest deal.”

Terry Scuoler, chief executive of EEF, the manufacturers' organisation, said: “EEF supports the announcement to hold a competition review on the UK's energy market.

“However, given the numerous reviews into the energy market and competition that have taken place over the years, and their subsequent failure to deliver any real change, Government must ensure that this time it will make a material difference by undertaking a rigorous evidence-based approach, with real teeth.”

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
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
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

Learning Support Assistant - Newport

£65 - £70 per day: Randstad Education Cardiff: Due to the continual growth and...

Operations Manager

competitive: Progressive Recruitment: I am currently recruiting for an Operati...

Project Coordinator/Order Entry, Security Cleared

£100 - £110 per day + competitive: Orgtel: Project Coordinator/Order Entry Ham...

Senior Digital Marketing Executive

£35000 - £45000 Per Annum: Clearwater People Solutions Ltd: Our client based i...

Day In a Page

Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star
How live cinema screenings can boost arts audiences

How live cinema screenings can boost arts audiences

Broadcasting plays and exhibitions to cinemas is a sure-fire box office smash
Shipping container hotels: Pop-up hotels filling a niche

Pop-up hotels filling a niche

Spending the night in a shipping container doesn't sound appealing, but these mobile crash pads are popping up at the summer's biggest events
Native American headdresses are not fashion accessories

Feather dust-up

A Canadian festival has banned Native American headwear. Haven't we been here before?
Boris Johnson's war on diesel

Boris Johnson's war on diesel

11m cars here run on diesel. It's seen as a greener alternative to unleaded petrol. So why is London's mayor on a crusade against the black pump?
5 best waterproof cameras

Splash and flash: 5 best waterproof cameras

Don't let water stop you taking snaps with one of these machines that will take you from the sand to meters deep
Louis van Gaal interview: Manchester United manager discusses tactics and rebuilding after the David Moyes era

Louis van Gaal interview

Manchester United manager discusses tactics and rebuilding after the David Moyes era
Will Gore: The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series

Will Gore: Outside Edge

The goodwill shown by fans towards Alastair Cook will evaporate rapidly if India win the series
The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz