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Energy secretary to ‘flex muscles’ over rising bills

Energy secretary to ‘flex muscles’ over rising bills

Energy secretary to ‘flex muscles’ over rising bills

  • 19 April 2017
  • From the section Business

Energy headline and coinsImage copyright
PA

“Muscular” action will be taken by the government against energy firms’ “damaging” price rises, a minister has said, but the timing remains unclear.

Business and Energy Secretary Greg Clark said that, owing to the imminent election, the date for this “decisive” move was being reviewed.

He repeated concerns about rising prices for “loyal” customers on default gas and electricity tariffs.

Five of the big six suppliers have announced price rises this year.

Mr Clark said he did not have the power to affect prices directly, but the government could act to alter a “deficiency” in the market.

Price rises

Major energy firms announced increases in standard tariffs in the last few months, blaming investment requirements, government demands and the falling value of the pound.

They include:

  • Npower increased its electricity prices by 15% and gas prices by 4.8% on 16 March
  • E.On is due to put up electricity prices by 13.8% and gas prices by 3.8% on 26 April
  • Scottish Power raised its electricity prices by 10.8% and gas prices by 4.7% on 31 March
  • EDF, combining previous prices changes with a second announcement of rises in June, will raise electricity prices by 18.1%, but gas prices will stay the same
  • SSE will raise electricity prices by 14.9% on 28 April, although gas prices will be unchanged
  • British Gas has announced a price freeze until August.

The energy regulator Ofgem said that some of the price rises were hard to justify and Mr Clark has now told the Business Select Committee that the market is “clearly not working” for those on default tariffs.

Image copyright
PA

Image caption

Greg Clark said the government action would come “soon”

The government is due to respond to a two-year investigation by the Competition and Markets Authority (CMA) which found that two-thirds of UK households were paying “over the odds” for their energy compared with those who have switched to a different tariff.

However, the CMA recommended that capping standard tariffs was not in the best interests of customers.

That conclusion has been challenged widely, and there has been widespread speculation that the government could intervene with some sort of cap on these variable deals.

Mr Clark told the committee that customers who could not shop around online, or who were not “fleet of foot”, were being “milked” by the energy companies.

He said the government’s response would be decisive, and later said it would be “muscular and strong”.

The timing would now require “reflection” following the expectation of an early General Election in June.

Source : BBC News – Business

Energy secretary to ‘flex muscles’ over rising bills

Energy secretary to ‘flex muscles’ over rising bills

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