Customers stitched up with higher bills as Big Six hold power, slams Watchdog

Customers stitched up with higher bills as Big Six hold power, slams Watchdog 

21/05/2008

The Sun

Energywatch chief exec Alan Asher slammed bloated and inefficient gas and electricity companies, saying consumers were getting it in the neck. The lack of competition in the UK market means prices are rising faster than in the rest of Europe, he told the House of Commons Business and Enterprise Committee.

His evidence came amid growing consumer concern over the sharp spike in energy bills, which have largely been blamed on the rising global price of fuel, with oil at more than $125 a barrel.

But Mr Asher also claimed the failure of the competition structures put in place when gas and electricity were privatised in the 1980s was also playing a part in forcing up bills.

Over the past decade, the energy supply market has slimmed down from 20 competing companies to six giants who form a comfortable oligopoly, with very little to choose between them in price terms, he said.

Although there was no evidence of direct collusion, Mr Asher said he believed suppliers followed the lead of the dominant player British Gas in raising or lowering prices.

And he warned the situation would get worse if French giant EDF buys nuclear power generator British Energy, leading to worse service and higher prices. Mr Asher was particularly damning of the treatment of Britains poorest customers - the 4.8 million customers using pre-payment meters. The companies actively ensure that these people dont switch, meaning that 4.8 million consumers are really closed out of the market. It is a mistake to think that oligopolies always make huge profits, he told the MPs. Often they just have bloated cost structures and they are inefficient. Sadly, that is what we have. SCOTTISH POWER yesterday removed the availability of the UKs cheapest capped tariff. Energy prices are predicted to rise by 35 per cent in the coming months and switching sites such as energyhelpline.com have seen a massive surge in switches for capped tariffs.

Director Mark Todd said There's currently a gigantic surge for capped energy tariffs with applications up by 10 times last week alone. This winter we have had credit crunch - next winter will undeniably be the energy crunch. Are you struggling with rising costs? Use Sun Money's free to see how you could cut your monthly repayments. Share this article Digg it! del.icio.us MySpace Facebook Fark Reddit NowPublic