Energy Firms Criticised at MPs' Hearing

A representative of an energy industry watchdog has delivered a stinging attack on the sector to MPs.

Speaking at a parliamentary hearing into competition among the UK's gas and electricity firms, chief executive of Energywatch Allan Asher attacked the companies for engaging in "tacit collusion" over pricing and termed competition a "myth" in the market. He also described the "big six" firms, including industry leader British Gas, for forming a "comfortable oligopoly" at the expense of consumers.

However, Mr Asher was also forced to admit when questioned by MPs that he had no proof that the companies indulge in price fixing, despite claiming that large suppliers such as Powergen and npower follow the lead of British Gas when it comes to pricing.

"In oligopoly markets, you don't need to meet in smoke-filled rooms," Mr Asher commented, going on to cite figures showing that the annual price difference for direct debit gas and electricity between the cheapest and most expensive firms was just £30, or "a few pence a week".

The comments, described by the Times as a "two hour tirade", provoked a strong response from energy firms. A spokesman for Centrica, the company that owns British Gas, said: "Despite the impact of record oil prices on the cost of gas internationally, Britain’s household gas bills remain the lowest in Western Europe, and our electricity is among the cheapest, too."
 

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