Energy regulator Ofgem “hasn’t done the job it needs to do” as a “guardian of the public interest” and that is why it needs to be abolished.
That’s the view of Shadow Energy Secretary Caroline Flint, who claims Labour’s plans for a new independent regulator will do much more as the energy market needs a “radical change”.
Speaking to ELN at the Energy UK conference yesterday, she said: “Our new regulator watchdog will do a lot of the work Ofgem’s already doing but we want to frame that new watchdog in a different place that recognises to take people with us on what’s going to be a challenging future in terms of the way energy will change and the way we use it. We need an independent watchdog that people can trust. That has to be good for business but it can also be good for customers as well.”
When asked about businesses’ concern about the party fiddling with policy and the changes in the electricity market reform (EMR), Ms Flint insisted the Labour party has signed up for the Contracts for Difference (CfDs), Capacity Mechanism and for a varied energy mix which will help attract investment.
She added: “I don’t think what we’re doing is fiddling with policy. I think it’s a big change in policy and it’s the radical change we need to get this market into a better place. That has to be good for business and if we don’t do that, we will constantly have these spats, year in year out and we’ve got to get to a better place.
“It is about restoring trust… Just as the Government has to work in the national interest, so does the energy sector too.”
The Shadow Energy Secretary added governments have to intervene “when markets aren’t working” and she believes the energy market “isn’t working the way it should”.
She said: “We need more transparency and there are many people out there, both generators of energy and smaller suppliers who would like to get in but actually it’s so dominated by the Big Six in terms of the way they generate energy, sell it to themselves and sell it to us. So this is about how we are pro-business – our freeze would actually also support all those businesses out there, large and small, who’ve also suffered from increased prices in recent times.”
Ofgem however insisted it is doing various things in the interest of consumers such as fining power suppliers if they don’t abide by the set regulations. A spokesperson told ELN suppliers have paid more than £70 million since 2010 “as a direct force of our actions”.
The regulator added: “We have also introduced the most radical set of reforms to the energy retail market since competition began. They will make the market simpler, clearer and fairer for consumers. This means that consumers will get fairer treatment from suppliers and by the end of December our cap on the number of tariffs suppliers can offer will be in place.”