Press Release
MP Demands An Investigation Into Energy
Companies and OFGEM
Coatbridge Chryston and Bellshill MP Tom Clarke blasted both Energy Suppliers and the Regulator as inflation busting price increases are imposed on vulnerable consumers. Mr. Clarke believes the issue of domestic energy prices should be subject to a full investigation by the Competition Commission, and he has urged the Minister for competition to order an inquiry.
During a Debate in the House of Commons he said: “The policies of the energy companies and the role of Ofgem have not avoided what seems to be a crass undermining of the Government’s policy on inflation. The fact is that millions of people in Britain, many of them in my own constituency, are finding that their quality of life has diminished because of the ever increasing domestic energy bills as suppliers’ leapfrog each other in the race to charge the highest price.”
In particular the MP derided the Energy Regulator OFGEM as impotent to do anything to help consumers. Tom Clarke MP added: “In response to the onslaught of price increases the Regulator advocates switching suppliers. Ofgem claim there is a ‘bonanza’ out there and that switching is the answer for many people. If there is a bonanza out there, it seems to me it is the one enjoyed only by the energy companies”.
Mr. Clarke repeated his call of a year ago that the energy suppliers should be more competitive when he said: “Labour MP’s in Lanarkshire proposed that energy companies should offer a ‘Lanarkshire Tariff’ to individuals in communities throughout our constituencies. We wanted suppliers to compete on the best discount not the highest price. This could be funded on the basis that if constituents purchased in bulk form one supplier, then they should be able to enjoy the huge discounts offered to big businesses”.
On the issue of switching suppliers he said: “ The publication of Save the Children findings, were very disturbing. It showed that nearly one in five families with children cannot afford to heat their homes, and that families could not keep their homes warm because of the cost. There are very few facts to support the view that switching suppliers is effective. Even if people wanted to switch that would take six to eight weeks. Indeed, Ofgem’s figures show that two thirds of pensioners have never switched. For the people who most need help, switching is not the solution. Given the negative experiences that pensioners often have when they switch, it is hardly surprising that so many of them are reluctant to go down that route. All the evidence is that no sooner do people move, but the energy company they have joined raises its prices, too”.
The MP cited further academic evidence quoting a study from the University of East Anglia that showed that about a third - 1.3 million people - switched to a tariff that was worse than their previous one. The plain simple fact is that many people are prevented from switching because of the lack of access, debt they have incurred or prepayment meters”.
The MP concluded:
The Government’s own adviser on fuel poverty has confessed that the big six energy companies
have raised their prices, especially electricity prices, by more than their cost increases and Ofgem has
done far too little even to investigate this. Therefore I am now calling on the Secretary of State
for Business, Enterprise and Regulatory Reform to instruct the Competition Commission to conduct a full
market investigation
and where necessary take action to increase competition”.