Chancellor urged to break up Big Six energy firms

Which? is calling on George Osborne to stand up for consumers and break up the Big Six suppliers to get more competition in the energy market. In a letter to […]

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By Priyanka Shrestha

Which? is calling on George Osborne to stand up for consumers and break up the Big Six suppliers to get more competition in the energy market.

In a letter to the Chancellor yesterday ahead of his Autumn Statement in December, the consumer body urged Mr Osborne to commit to separating energy generation from supply and end the “blank cheque” for suppliers’ delivery of the Energy Company Obligation (ECO).

Figures suggest energy companies collected an estimated £975 million this year so far through the ECO levy on consumers’ bills but are behind their targets in insulating vulnerable homes.

Which? has estimated nearly £200 million could be saved if suppliers delivered the ECO “more efficiently”.

Richard Lloyd, Executive Director said: “When George Osborne stands up to deliver his Autumn Statement we want him to stand up for the millions of hard-pressed consumers who are grappling day-to-day with rising energy costs. He must cut the Big Six companies and the cost of Government energy policies down to size.”

The consumer body is asking the Chancellor to re-target the ECO, halt the smart meter rollout, take the Warm Home Discount off consumers’ bills – which it says could cut bills by more than £290 million a year – and scrap the carbon floor price, a move it claims would take £1 billion off bills next year.

DECC agrees stronger competition is key to tackling energy bills but believes the ECO is as helpful.

A spokesperson said: “The Energy Company Obligation helps people save energy and money on their bills, through prompting energy companies to green-proof their customers’ homes. Having warmer and more energy efficient homes, as a result of the Energy Company Obligation, will result in lower energy use and by default lower energy bills.”

The call comes as the Big Six were challenged to justify the recent price hikes to MPs yesterday. Ofgem has released figures which cast doubt on the suppliers’ claims that most of the rises are due to higher wholesale energy costs.