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Energy companies urged to 'break ranks'

Energy companies have been urged to “break ranks”  on improving pricing, offering cost transparency and helping their most vulnerable customers.

Ed Mayo, the organisation’s chief executive, told Parliament’s Business and Enterprise
Committee that he still held deep concerns about the competitiveness of the UK gas and electricity market and Consumer Focus was trying to put pressure on companies to improve.

Consumer Focus
says it is committed
to off gas customers

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But, he added Consumer Focus was also trying alternative approaches by looking to highlight the advantage of improving services to customers: “We have the opportunity to reward companies that do break ranks. We have to build public pressure while understanding the drivers for business.”

Despite this slight concession to market forces Mr Mayo was generally scathing about the level of competitiveness within the industry and described the market as “broken”.

As a result he said Consumer Focus had placed fuel poverty and energy as the top priority for its work and was calling on companies to pass on falls in wholesale gas and energy prices to consumers.

He said: “We have seen the companies act like a hard in terms of putting up prices. If they act like a herd in delaying bringing down prices now that wholesale prices for gas and energy have come down very significantly, that would raise further questions about the nature of this market.”

He added: “Ofgem’s conclusion that there is no smoked filled rooms and collusion, I think, doesn’t answer the question that in a market with six dominant suppliers you don’t need to get into a room to work out what the prices ought to be”

Lord Whitty, chairman of Consumer Focus, also raised his concerns about energy supply and the loss of two smaller independent companies BizzEnergy and Electricity4Business over the last month.

He said: “The structure of the industry means it is not a competitive industry.

“We thought competition was about bringing in new suppliers so you can have genuine competition for every user and that is not the case for businesses or households.”

Peter Luff MP, chairman of the committee, encouraging more companies to come into the industry was important. He said: “If it is just the big six then competition is dead.”