Government considers jail for power company bosses caught fixing energy price rises

Energy Secretary announces a range of measures to crack down on energy companies

Deputy Political Editor

Power company bosses who conspire to inflate prices by rigging the energy market could soon face jail, the Government announced today following accusations of being soft on the “Big Six” firms which supply almost all of Britain’s gas and electricity.

Ed Davey, the Energy and Climate Change Secretary, raised the threat of criminal sanctions similar to those which apply to bankers found guilty of manipulating financial markets for their own gain.

He also promised moves to enable customers to switch suppliers within 24 hours, rather than the typical five-week period, and an initiative to force companies to be more transparent about pricing.

The Energy Secretary set out the plans as the Government seeks to get on the front foot over the soaring energy costs.

Four of the “Big Six” companies have already announced price rises averaging more than nine per cent.

Executives from the firms came under fire after an appearance before MPs this week in which they blamed the rises on wholesale prices, so-called “green levies” and transport costs.

Mr Davey announced plans for a new criminal offence of manipulating gas and electricity prices as he delivered the Government’s annual energy statement.

At the moment it is only a civil offence, with no existing criminal offence specifying price-rigging in the energy market. Officials confirmed the maximum punishment could potentially be a substantial jail sentence.

“Companies need to know that any wrongdoing will be uncovered and dealt with,” Mr Davey told the Commons.

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

Mr Davey challenged the industry to put its customers in control.

“That means making it easy for people to change supplier to save money, it means regular market assessments to check their behaviour and it means tougher penalties for market manipulation and putting an end to opaque finances,” he said.

Mr Davey said he would meet companies in the coming weeks to tell them they had to encourage competition by making it quicker and easier for customers to change their supplier.

And he announced that the energy regulator, Ofgem, was to carry out an annual review of the behaviour of companies to ensure they were acting in consumers’ interests.

But Caroline Flint, the shadow Energy and Climate Change Secretary, protested: “It’s another day, another policy that will do nothing to help people with their bills this winter.

“Hard-pressed energy customers struggling with the cost of living need action now, not endless reviews and consultations from an out-of-touch Government that refuses to stand up to the energy companies.

“What we need now is a price freeze because this is the only way we can deal with the energy companies overcharging.

Friends of the Earth energy campaigner, Sophie Neuburg, said: “Ed Davey is right. Bills are soaring thanks to rising gas prices, but promoting easier switching is like rearranging the deckchairs on the Titanic.

“The real solutions – massive investment in energy efficiency and a rapid switch to renewables –are conspicuous by their absence from the minister’s plans.”

Energy UK, which represents the major firms, said: “Energy companies welcome scrutiny about how the market is working and our members have nothing to hide.

“Energy companies are also committed to quick switching and have kept government fully informed of the work already underway to cut switching times dramatically while making sure customers’ consumer rights are protected. Already around one quarter of a million customers switch every month, proving it is not only possible but easy.”

Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
News
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
News
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
News
A polar bear’s diet is rich in seal blubber and half of its own body weight is composed of fat
i100
News
London is the most expensive city in Europe for cultural activities such as ballet
arts
Travel
Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
Jeremy Clarkson has rejected criticisms of his language, according to BBC director of television Danny Cohen
tv
Extras
indybest
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Arts and Entertainment
tv
Sport
Is this how Mario Balotelli will cruise into Liverpool?
football
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

Application Support - Enterprise Java, SQL, Oracle, SQL Server

£45000 - £55000 per annum: Harrington Starr: A well-established financial soft...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape