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Gas watchdog: 'Call in Competition Commission'

Consumer watchdog energywatch called for further action to combat energy bill rises when it faced a cross party committee of MPs.

Energywatch chief executive Allan Asher attacked energy company policies as he gave evidence to a Business and Enterprise Select Committee Inquiry looking into energy markets.

Mr Asher said: “The level of competition in the energy market has been allowed to degrade over recent years. Consumers have paid for this with high prices and poor service.

“The starkest manifestation of this is 4.5 million households in fuel poverty and a rise of 43 per cent in the number of consumers coming to energywatch for help.

“We need to stop this from getting worse, and start taking the steps to make it better.”

Mr. Asher called on the committee to back three crucial measures. These are bringing in Competition Commission to investigate the market, introducing more openness, trying to cut the link between gas and oil prices.

Mr Asher said: “Twenty suppliers and twenty generators have been forced out of the market. No new entrants of any size have broken into this comfortable, vertically integrated, closed shop.

'The wholesale electricity market has collapsed. The price setting is opaque at best, with scant reference to the fundamentals of supply and demand.

“The Competition Commission has the independence, skills and resources to get to the root cause of the problems and identify effective and proportionate remedies. But they are bystanders at the precise time when they should be prime movers.”

UK suppliers insist gas and electricity bills are amongst the lowest in Europe despite record gas price rises, but Mr Asher argues the link between gas and oil prices needed to be broken as he believes it is an “artificial indexation”.

He said: “Government and Ofgem have claimed that up to 40 per cent of the price of gas is caused by this oil link. It should be the number one priority for competition bodies and for the UK government to cut these artificial links.

'Suppliers themselves are victims of this indexation. For some reason GB has chosen accommodation with these anti-competitive practices, rather than take the fight to the big oil and gas producers.”