'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
News
people
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvOnly remaining original cast-member to leave crime series
Sport
Frank Lampard and his non-celebration
premier leagueManchester City vs Chelsea match report from the Etihad Stadium
Sport
premier league
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
Sport
Mario Balotelli celebrates his first Liverpool goal
premier leagueLiverpool striker expressed his opinion about the 5-3 thriller with Leicester - then this happened
News
people'I hated him during those times'
News
Britain's shadow chancellor Ed Balls (L) challenges reporter Rob Merrick for the ball during the Labour Party versus the media soccer match,
peopleReporter left bleeding after tackle from shadow Chancellor in annual political football match
Arts and Entertainment
Female fans want more explicit male sex in Game of Thrones, George R R Martin says
tvSpoiler warning: Star of George RR Martin's hit series says viewers have 'not seen the last' of him/her
News
i100
News
Dame Vivienne Westwood has been raging pretty much all of her life
peopleMemoir extracts show iconic designer 'felt pressured' into going out with Sex Pistols manager
Life and Style
fashionAlexander Fury's Spring/Summer 2015 London Fashion Week roundup
Arts and Entertainment
Lauryn Hill performing at the O2 Brixton Academy last night
musicSinger was more than 90 minutes late on stage in Brixton show
News
i100
News
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
News
people''Women's rights is too often synonymous with man-hating'
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

Head of Marketing and Communications - London - up to £80,000

£70000 - £80000 per annum: Ashdown Group: Group Head of Marketing and Communic...

Nursery Nurse

Negotiable: Randstad Education Manchester: Level 3 Nursery Nurse required for ...

Nursery Nurse

Negotiable: Randstad Education Manchester: L3 Nursery Nurses urgently required...

SEN Teaching Assistant

Negotiable: Randstad Education Manchester: We have a number of schools based S...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam