The UK’s gas and electricity suppliers have been accused of failing “to play it straight” with consumers as the energy watchdog unveiled a proposed shake-up of the industry.
Following a review of the retail market, Ofgem said for the first time it had evidence the “big six” firms had hiked bills in response to rising costs faster than they reduced them when expenses fell.
The regulator has threatened the major suppliers with a referral to the Competition Commission if they do not simplify prices and sell off between 10% and 20% of their electricity output to allow smaller firms to enter the market.
The watchdog hit out the number of different tariffs available and called on firms to narrow the range of standard tariffs on offer.
Ofgem launched its review in November after it emerged that price hikes had seen profit margins soar by an average of 38% at major suppliers, which include British Gas, E.ON Energy, EDF Energy, Scottish Power, npower and Scottish & Southern Energy.
The watchdog’s report was welcomed by consumer groups and the Department of Energy and Climate Change, while industry representatives also backed moves for more transparency in the market.
Ofgem chief executive Alistair Buchanan said: “Consumers must have confidence that energy companies are playing fair at a time when they are being asked to foot the £200 billion bill to pay for the investment Britain needs to ensure secure and sustainable energy supplies.”
The review found competition was being “stifled” by complex tariffs, poor supplier behaviour and a lack of transparency.
The number of tariffs available has risen by 180 to more than 300 since 2008, leaving customers “bamboozled”, Ofgem said.
Two wind farm projects approved
The Scottish Government has agreed to allow two wind farm projects to go ahead, despite opposition from aviation radar operators.
Black Law wind farm near Shotts, North Lanarkshire, can have another 23 turbines built, officials said, and plans for a new wind farm in Blackcraig, New Galloway, were approved. This will also see 23 turbines built.
Scottish energy minister Jim Mather said: “Black Law is already a successful wind farm that has turned an open-cast mine into a green energy centre. Once the extension is complete, the wind farm will generate enough green electricity to power 98,000 homes.
“Blackcraig wind farm is a significant development which will make a valuable contribution to meeting 80% of Scotland’s electricity demand from renewables by 2020.
“Both of these developments faced objections from aviation radar operators and the fact that these have been successfully addressed is a mark of the progress being made in tackling aviation issues in wind farm deployment.”
UK ‘to face shortage of 1m homes’
The UK will face a housing shortage of around one million homes by 2015, with demand outstripping supply by up to 150,000 this year, Savills PLC has predicted.
Figures released by the property broker show that the shortfall across the UK was around 344,000 homes last year. When the housing boom peaked in 2006, demand outstripped supply by 60,000 homes each year.
The group said London would be worst hit by the shortage, as construction fails to keep pace with the growing population in the south of England.
Savills head of residential research Yolande Barnes said: “It’s the usual conundrum that with economic growth comes a growth in people.
“It’s the areas of highest population growth, so London and the South rather than the Midlands and the North that are the most hard- pressed.”
The estimate by Savills follows the Government’s revelation that the number of homes built in England and Wales last year was the lowest during peace time since 1924.
The housing shortage means prices are continuing to rise even as banks curb lending during the biggest budget squeeze since World War II.
House prices rose by 0.3 per cent in February, according to Acadametrics Ltd, while banks approved a total of 45,723 mortgages in January, about half the average over the last decade.
Ucatt criticises inspection changes
Cutting the number of workplace safety inspections will see workers play Russian Roulette with their lives because companies will be allowed to ignore the rules designed to protect staff, Ucatt has said.
The Government plans to have automatic inspections of nuclear, chemical and energy-producing sites only because businesses are having to deal with too much bureaucracy, according to safety minister Chris Grayling.
But Ucatt pointed out that Health and Safety Executive inspection, enforcement and prosecution numbers have all declined dramatically recently.
HSE officials carrying out unannounced, intensive inspections across the UK recently showed that around one in every four construction sites display serious safety failings.
A spokesperson for the union said: “The Government are using myths and distortions to introduce what amounts to an attack on worker safety.
“These plans will allow employers to ignore safety rules, as they will know that they will not be prosecuted.
“Workers should not be forced to play Russian roulette with their safety.”
The Tory-Lib Dem coalition also wants a long-term review of all workplace safety laws, which it argues is an opportunity to get rid of “unnecessary” legislation.