At a Liberal Democrat party conference today, Energy Minister Chris Huhne is expected to launch an attack on the ‘big six’ energy suppliers, accusing them of “predatory pricing” and forcing smaller competitors out of the market.
He will state that the big companies must stop the practice of enticing new customers to join through cheap deals, which mean that their loyal customers face higher bills and that smaller competitors have no chance to get a foot in the door.
Mr Huhne will say: “It is not fair that big energy companies can push their prices up for the vast majority of their consumers – who do not switch – while introducing cut-throat offers for new customers that stop small firms entering the market.
“That looks to me like predatory pricing. It must and will stop.”
The ‘big six’ companies are energy giants British Gas, Scottish and Southern Energy, Scottish Power, E.On, EDF Energy and npower.
Regarding the energy suppliers, Mr Huhne is expected to say: “We are determined to get tough with the big six energy companies to ensure that the consumer gets the best possible deal. We want simpler tariffs; requiring energy companies to tell you whether you could buy more cheaply on another tariff.
“I want to help households save money. Simpler charging. Clearer bills. Quicker switching. And more consumer-friendly firms dedicated to doing the shopping around.”
Many reforms are expected to be suggested such as allowing customers to change their supplier within just three weeks, and imposing hefty fines on suppliers who overcharge their customers.
The money raised from fines will then be directed back to the consumer rather than going into the Treasury.
Energy suppliers are currently able to block the watchdog Ofgem from making rulings about their bad behaviour by referring their decisions to the competition commission. This process can take a year.
The new plans will allow energy companies to appeal against Ofgem’s rulings, but this will be a faster process.
Mr Huhns will say later today: “I believe Ofgem should have new powers to secure redress for consumers — money back for bad behaviour — and we will stop the energy companies from blocking action by Ofgem, which can delay matters by a year.”
Recently energy companies have been accused of increasing prices by up to 20% on combined gas and electricity bills, forcing up payments by £200 per year for the average household.
It is estimated that the price hikes could result in 6.4 million households spending more than 10% of their income on energy bills.
If you want to make a complaint to your energy supplier, try using this template letter to get your point across.
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