Monday, 29 October 2012
Consumer group challenges rising energy bills
In an open letter to the Prime Minister, the consumer group challenged the validity of continuing price increases and said that consumers deserve the truth.
Richard Lloyd, executive director of Which?, said it was time for government to face the fact that the energy market is broken.
“We want an independent review to look at whether the reasons given for the recent price increases are justified,” he said.
“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. They also blame the cost of implementing your government’s environmental and social policies for the price rises. Yet, as your own Energy Department has said, there is no hard evidence to back this claim up.”
This follows the news that four of the UK’s ‘big six’ energy companies are increasing prices this winter.
The letter outlined that energy prices are one of consumer’s top financial concerns with 75% of consumers on the most expensive tariffs and the average energy bill already rising 13% since last year.
“Until we see greater transparency and prices presented clearly, consumers will continue to distrust the energy market and remain unable to drive genuine competition through moving to the cheapest tariffs,” Lloyd added.
“The time for action is now. Warm words alone are not enough to keep consumers from the cold this winter.”
In response, a DECC spokesman said: “Households facing rising energy bills this winter aren’t going to be helped by more inquiries or investigations that could take years to complete and implement. We know what the problems are; we want to get on with tackling them now. We’re focussing on action, not more words.
“The fact is reforms by Government and Ofgem, including electricity market reform through the forthcoming Energy Bill and Ofgem’s ongoing Retail Market Review, offer the quickest way to boost consumer confidence in the energy market.
“We have the Energy Bill due this autumn, and Ofgem is due to move to the next stage of its review before winter. In the meantime we’re offering practical advice to households on how to get energy bills down and keep their homes warm.”
However Lloyd said that while Ofgem’s proposals to change the retail energy market are necessary, they are not enough. To read the letter in full, visit the Which? website.