Thursday, 19 August 2010

Coalition turns down heat under energy suppliers

The Coalition Government has shelved plans for an independent inquiry into the £25bn-a-year energy industry amid accusations of profiteering on electricity and gas.

Before the general election, the Conservatives and the Liberal Democrats repeatedly criticised Labour for failing to tackle prices charged by the Big Six suppliers. Both the opposition parties demanded an inquiry by the Competition Commission.

An inquiry would have the power to reform the industry, encourage new entrants to break the hold of players such as British Gas and EDF on 99 per cent of the market and, potentially, impose price caps.

However four months into the Coalition Government, no inquiry has been called and the Department of Energy and Climate Change confirmed last night that it has no plans to refer the industry to the Competition Commission.

The news comes amid the possibility that the Coalition will reduce the Winter Fuel Payment for older people, worth £250 per household, or £400 where at least one partner is 80 years old.

With annual bills over £1,000, social problems caused by high energy prices have escalated.

Homes in fuel poverty – defined as spending 10 per cent or more of their income on fuel – have trebled in five years to around 6.6 million. Figures released in December showed that during the cold winter of 2008/09, "excess winter mortality" jumped by 49 per cent to 36,700, sending an extra 10,000 pensioners to early graves.

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