It is one year since David Cameron summoned the biggest power companies to an “energy summit” at Downing Street where they were ordered to keep bills down for hard-pressed consumers.
In a joint article previewing that event, the prime minister and the energy secretary (one Chris Huhne) expressed their determination to see a fall in prices.
“Speaking before the meeting, Huhne told BBC Radio 4′s Today programme that the government would be on the consumers’ side to ensure they got a better deal“, as the Guardian reported at the time.
Often this stuff gets written up without any comeback; so how has the situation improved since then?
As Which?, the consumer group, says: “Warm words are not enough to keep consumers from the cold this winter.”
The group says that the average energy bill has already risen 13 per cent since the last year; and now 20m households are facing further above-inflation rises announced in recent days by four of the big six companies.
It should come as no surprise that Ed Miliband has focused on energy prices as a key concern of recession Britain.
Ofgem will come up with proposals to transform the retail energy market soon – but Which? believes this is not enough and is urging an “urgent” independent review.
“After the Energy Summit, you said ‘we are making energy companies be competitive’ but there is little evidence of this. Seventy five per cent of consumers are on the most expensive tariffs and the level of switching continues to decline.”
Interestingly, Which? does not suggest that the cause for rising bills is primarily the “environmental and social policies” that the energy groups often complain about.
“They also blame the cost of implementing your government’s environmental and social policies for the price rises. Yet… there is no hard evidence to back this claim up.”
Instead it lays the blame with the industry itself:
“It’s time to face facts: the energy market is broken. People are questioning whether they are paying a fair price for their gas and electricity. The energy companies blame wholesale price increases but even the regulator has found that prices don’t fall when the wholesale price drops. The sector is dominated by a handful of big and powerful players who are seemingly unaffected by the normal competitive pressure of price and customer service.”
Jim Pickard
Kiran Stacey