Are You Really Convinced About Coalition Government Now Determined To Stop Energy Companies' Anti-Competitiveness?
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I heard yesterday that the Energy And Climate Change Secretary, Chris Huhne is looking at giving Ofgem new powers to require energy companies to provide direct redress when consumers have lost out as a result of a company breaching a licence condition. The big six firms are EDF energy, British Gas, EON, Npower, Scottish and Southern Energy and Scottish Power.
At present, Ofgem has powers to fine companies up to 10% of their annual turnover, which goes to the Treasury, But Huhne is to propose that the money could go direct to customers, either as compensation or in lower bills.
I know that Mr Huhne is probably sincerely genuine in his intentions about helping out the wee small customers in their endless fight against unfair and unwarranted extent of sky high energy price increases from the greedy big 6 energy companies. However, these companies were wrongly privatised many years ago and have been allowed for years now to conduct similar price increases in approximately the same time. I cannot see how government can force them to reduce prices by a certain amount or force them to increase by not more than or less than the rate of inflation as was being implied from Mr Huhne's speech. These are private companies after all. The best way to mitigate against more sky high prices it to lock yourself into a 2 year or 3 year fixed rate because very much unlike interest rates in the next 2 years energy prices are likely to go up and up during that time not come down to pay for long term capital investment into other sources of fuel provision.
Responses (3)
If this government realy intended helping the customers of the power companies they would bring in a zero rate of vat on power bills and help everyone in one stroke.
I agree that switching suppliers is probably the best way of containing spiralling energy costs, just as many people do routinely with car insurance. Market forces will always be more powerful than any government intervention. Just by the way I had two letters from EDF yesterday, one saying that I was in credit by £200+, another saying that I owed them £157 and seeking payment. When I rang their customer service number I was told by the automatic answer to expect delays as a new computer system had been installed, and despite employing a further 700 (yes, 700) new staff, they were struggling to answer callers quickly. When I eventually got through the advisor couldn't help because their system was down. But to be fair they rang me back within an hour to say they had messed up and had put things right. I still can't quite get over the candidness of the automatic answer and the thought of 700 new advisors struggling to cope.
I cannot see how the government will interfere in private enterprise.
True, the aim behind de-nationalising the energy industry was to improve and increase competition. However, that hasn't worked and all energy companies act as a cartel and are wholly responsible to their shareholders and to hell with their customers.
But with all energy companies increasing their prices in line with each other, where is the competitiveness in pricing to be had?
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Well said Noddy as VAT on fuel is about 6%.
Good idea Noddy, do you fancy running for chancellor? I'll back you.