Big Energy rips off UK households £1.7bn per year – competition watchdog

Fuel poverty campaigners have slammed the competition watchdog for suggesting customers “switch provider” in order to save cash after discovering energy firms overcharge the British public £1.7 billion every year.

The long-awaited report into unfair energy charges by the Competition and Markets Authority (CMA) was described as “pathetic” and a “complete waste of time” by critics.

Prior to publishing the report, the CMA scrapped plans to introduce caps on fuel bills or break up the ‘Big Six’ energy companies to separate supply from power generation.

Instead the watchdog advised “disengaged” customers to shop around for a better deal and introduced a price cap, which would only affect the relatively small number of households on prepaid meters.

Laura Hill, of campaign group Fuel Poverty Action, described the report as the product of “extensive lobbying” by energy firms.

“Today’s announcement is a testimony to the stranglehold of the big six over this investigation. Extensive lobbying has resulted in these pathetic watered-down recommendations, which will have little impact on the majority of hard-pressed households who have spent the winter shivering in their home.”

Labour energy and climate change spokeswoman Lisa Nandy said more transparency is needed in the market.

“This investigation has confirmed that millions of families and businesses have been overcharged for their energy bills to the tune of billions of pounds, yet energy companies are still being let off the hook.

“This was a critical chance to shake up a broken energy market and make sure savings from falling wholesale prices are passed on to customers. Only more transparency and competition can deliver this.”

Energy policy professor Steve Thomas, of the University of Greenwich, said the recommendations will do little to change collusion between the big fuel firms.

“The CMA report has failed to tackle what really concerns consumers: the UK is supplied by a cozy group of six companies who know very well without the need to collude that the last thing they need is the price war that real competition would lead to. The CMA measures will do little to change this.”

Writing for the Canary, journalist Elizabeth Mizon said the report demonstrates how far the UK political sphere is influenced by the needs of business.

“What the CMA’s lackluster ‘intervention’ into energy governance shows is that the UK political sphere, highly influenced by the ‘needs’ of business and the neoliberal thinking that favors it, is wildly out of touch with the realities of the energy crisis.”