'Full force of the law' threatened over gas price-fixing allegations

 

Those involved in the alleged rigging of Britain's wholesale gas market will face the "full force of the law", Energy Secretary Ed Davey warned today.

Mr Davey promised "firm action" if there was any truth in allegations of gas price manipulation made by a whistleblower to the Financial Services Authority (FSA) and energy watchdog Ofgem.

In a statement to MPs, Mr Davey said: "I see it as my job to protect consumers, not least the most vulnerable who can suffer the most when markets are abused."

He said it was not possible to understand what impact any attempted manipulation, if proven, had on the market or prices paid by consumers.

But the Government had "absolute determination to clamp down on any abuse that is uncovered, wherever and by whoever".

Prime Minister David Cameron's official spokesman said that if the claims, published in the Guardian, were true then regulators should come down "very hard" on those responsible. He added that energy price manipulation was "totally unacceptable".

All six of the big energy companies have released statements denying any involvement in attempts to fix the £300 billion market.

The industry trade body, Energy UK, which represents the companies, said its members would co-operate fully with the regulators.

Angela Knight, Energy UK chief executive, said: "This is a very serious issue which must be investigated swiftly.

"The gas market is an international one with many overseas companies trading on it as well as organisations that are not energy companies.

"Our members will all co-operate fully with the regulators and others. Customers need to have confidence in markets and authorities need to have the powers to regulate well and take action if required."

The FSA and Ofgem are both looking into allegations made by whistleblower Seth Freedman, who worked at ICIS Heren, a company responsible for setting so-called benchmark prices.

Mr Freedman raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company.

Ofgem was warned by ICIS Heren that it had seen evidence of suspect trading on September 28, the date that marks the end of the gas financial year.

It is believed prices went down by about 0.4% on September 28 - a key date as it can have an influence on future prices, according to the Guardian.

Mr Davey said his department and the Treasury were made aware of the allegations by the FSA last Friday.

In a statement to MPs, Mr Davey said: "These allegations of market manipulation are being taken very seriously. We will support the regulators taking whatever steps necessary to ensure that the full force of the law is applied, if they are true, so that any guilty parties are held to account."

Mr Davey encouraged anyone with information to contact the regulators, stressing that there were powers to protect the identity of whistleblowers.

The Energy Secretary said the UK had played a leading role in European Union-wide regulations for the market and if regulators needed more powers, they should tell his department.

Shadow energy secretary Caroline Flint said wholesale gas prices made up about half of the average bill.

She said: "Energy companies are very quick to blame wholesale costs when they put up people's bills, so any suggestion that the wholesale gas market has been manipulated is a very serious allegation that needs a full and rapid investigation."

Ms Flint called for energy to be pooled before it is sold to consumers by the various suppliers, making the market more open, transparent and competitive - and energy cheaper.

She also repeated her demand that industry watchdog Ofgem should be scrapped and replaced with "a tough new regulator".

Patrick Heren, who founded ICIS Heren but has since sold the company, said that his team spotted trades at unusual prices on a fairly regular basis, but were told to discount them when setting benchmark prices.

Anyone who failed to do so "was not doing his job", he said.

Mr Heren told BBC Radio 4's World At One: "What happened in this case was that traders put through large trades that were slightly out of the market, with the hope that we would take that as evidence to where the market was, when it quite clearly wasn't. So we would discount it."

Friends of the Earth's head of campaigns Andrew Pendleton called for a public inquiry into the UK's "broken" energy market.

He said: "Price-fixing claims like these highlight the urgent need to overhaul our energy system to make it clearer, fairer and cleaner.

"With the Energy Bill expected next week, ministers must seize the chance to end the nation's gas dependency and open up the market to a wider range of smaller firms generating affordable and clean British energy."

PA

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
J Jefferson Farjeon at home in 1953
booksBooksellers say readers are turning away from modern thrillers and back to golden age of crime writing
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
News
Stacey Dooley was the only woman to be nominated in last month’s Grierson awards
mediaClare Balding and Davina McCall among those overlooked for Grierson awards
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Voices
Joseph Kynaston Reeves arguing with Russell Brand outside the RBS’s London offices on Friday
voicesDJ Taylor: The great tradition of St Paul and Zola reached its nadir with a worker's rant to Russell Brand
News
Twitchers see things differently, depending on their gender
scienceNew study shows that birdwatching men have a lot in common with their feathered friends...
News
i100
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
News
Xander van der Burgt, at the Royal Botanic Gardens, Kew
scienceA Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
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: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick