Friday 28th October 2016                 Change text size:

Big six energy bosses grilled by MPs over price hikes

Stefano Brivio via Flickr

Energy chiefs from the big six suppliers were grilled by MPs on Tuesday amid a fierce political row over rising consumer bill prices.

Four of the bosses appeared before the energy and climate change committee, and blamed the increases largely on “external costs and pressures”, which they say were “out of [their] control”.

They also claimed that an increase in wholesale prices had stimulated the announcements, despite Ofgem saying that wholesale prices had remained broadly flat.

MPs accused the energy companies of conferring on energy prices and even suggested that they were buying energy for themselves at above market rate prices, a claim which the energy companies denied.

Ian Lavery, Labour MP for Wansbeck, told energy bosses, “Lots of people up and down this country cannot afford to pay for what you’re providing. There’s an opportunity to renationalise [the industry] because you cannot run the companies.”

William Morris, managing director of SSE, which announced price hikes of 8.2% at the beginning of October, blamed the increases on “green levies”, including the energy company obligation (ECO). He said that if the government was to raise capital to fund this through general taxation, energy bills would fall.

Energy bosses labelled the green levies as a “regressive poll tax, effectively a stealth tax”.

Campaigners dismissed these claims. Doug Parr, chief scientist at Greenpeace, said, “For the big six to try and use green taxes as a fig leaf for rising energy prices marks a new low for them, which is saying something.

Gas prices, not renewable energy, have pushed bills up.Green taxes remain a fraction of household bills, and are one of the best investments that can be made today to reduce costs for consumers over time.”

Stephen Fitzpatrick, managing director or Ovo Energy, said the big six was monopolising the markets and charging customers as much as they felt they could get away with. They were also accused of operating an “oligopoly”.

Fitzpatrick argued that “competition is the only way to keep bills down”.

Consumer group Which? also launched the “Cut them down to size, George” campaign on Tuesday, in which it is calling on chancellor George Osborne to increase competition by reducing the size of the big six.

Further reading:

Which? calls on chancellor to cut big six energy companies ‘down to size’

Business leaders to PM: cutting green taxes ‘shortsighted’

Ofgem data shows wholesale energy prices have remained broadly flat

Cuts to green levy? Not on my watch, says Ed Davey

UK second worst for fuel poverty in EU – as groups warn over coming ‘crisis’

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