Energy rip-off exposed

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BRITAIN’S biggest energy companies have stifled competition to raise prices and make record profits of more than £4.5 billion, a Sunday Times investigation has found.
The six companies that control Britain’s gas and electricity are now facing demands that they be referred to the Competition Commission.
Executives in charge of the six major companies were last week confirmed to be holding confidential meetings at least every two months to discuss market strategy. Smaller rivals are excluded.
The new disclosures come as a YouGov poll for The Sunday Times reveals that more than eight out of 10 customers believe they are being “ripped off” by the energy firms. Alistair Darling, the chancellor, is to meet Sir John Mogg, the head of regulator Ofgem, tomorrow for an explanation of the latest round of price rises.
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• Big six energy firms keep domestic bills inflated

• Rip-off Britain is back

Industry insiders said they are ready to give evidence about how the “big six” have driven up prices and boosted profits by:
- Keeping each other’s prices in step by raising and lowering tariffs within a few weeks of each other.
- Denying smaller rivals fair access to energy from their own power plants at affordable prices.
- Charging loyal customers significantly more than those who switch, so keeping up profits.
- Stifling competition by supporting laborious and expensive accreditation for new companies.
Allan Asher, chief executive of Energywatch, the consumer watchdog, said: “The problem with the energy market is that it’s lazy, complacent and uncompetitive. It has been able to drive out the possibility of any vigorous challenge to the prominence of the big six energy suppliers.”
The companies enjoyed a “bumper year” in 2007, profiting from a dramatic fall in the wholesale price of gas amid allegations they failed to pass on savings to householders. Analysts believe the companies are now poised to report record annual profits of more than £4.5 billion.
The companies last week confirmed that they were meeting regularly under the auspices of the Energy Retail Association. The association says market-sensitive issues are never talked about and pricing policies are discussed only in the context of a public debate about best practice. Rival energy companies say the association is a “closed shop” for the dominant companies and the minutes of meetings should be published.
The Sunday Times YouGov poll found that 85% of customers felt they were being ripped off by the energy firms. This compares to 76% of people who felt they were being ripped off by the railways; 74% by the petrol companies; and 59% by the banks and financial service industry.

http://www.timesonline.co.uk/tol/news/uk/article3177612.ece

geordie_joe

We know we are being ripped off, it's all Maggies fault.

There was a time when the phones were run by the post office, which was owned by the government. Then Maggie and "that bloke" sold off the phone part of the post office to BT. Who immediately increased the minimum price of a phone call from 2p to 5p. I w remember having a phone in out house and phone box outside our neighbours house. For a time we used to go to the phone box to make calls because they were only 2p but to make a call from home cost 5p.

Eventually BT got round to changing the phone boxes too, but they actually repainted all the old post office vans first!

Then they set off with the attitude of "we can treat you like sh*t" and get away with it because if you want to make a phone call we are the only company you can deal with".

I also remember gas being supplied by the "gas board" and my parents never complaining about their gas bills. I even remember the change over to north sea gas when all the fires and cookers in the country were "converted" for free. Then the gas board was sold off and now you can't even phone then without paying over the odds for an 0845 number.

Simple fact - all our assets have been sold to companies that are only there to make a proifit. So we are paying for it.

JasonLVC

All Maggies Fault (LOL)!. 10 years of labour they could have re-nationalised anyone of them if they wanted to, introduced laws to stop foreign companies buying UK essential services industries (like they od in France) and any raft of other measures.

There is nothing wrong with public companies being sold and operated into a competitive environment, the problem comes from three distinct areas :-

1. Weak consumer bodies. OfGen, OfCom - etc are supposed to have the powers to control specific sectors. Instead, they appear to be sleeping with the enemy - permitting price rises beyond inflation (like the rail regulator capping certain fares but not others - it makes no sense). OfGen recently permitted above inflation increases for electric companies in return for them offering greener tarrifs and fancy new energy use remote controls for consumers. Ridiculous, they could afford to offer these gadgets and keep prices down and still make a profit but OfGen allowed them.

2. Collusion. Most big business get around to colluding at some point and hope no-one finds out. and the utilities are just the same with one price rise from company A being followed the next week by company B.

3. The consumer. Despite over 100,000 customers switching utilities, they account for something like less than 15% of the total market. British Gas still has 50% market share despite EVERYONE knowing how bad and expensive they are. Only a few thousand will switch from NPower (indeed, my tarrif with them is NOT going up at all, only those on the standard tarrif are being hit - so proves that customers can only blames themselves).

Same with BT - I don't use them, yet millions can't be bothered to switch to Sky or Cable - and so whilst the consumer behaves in this lazy manner, why should the supplier change their ways?.

geordie_joe

JasonLVC wrote: »

All Maggies Fault (LOL)!.

1. Weak consumer bodies. OfGen, OfCom - etc are supposed to have the powers to control specific sectors. Instead, they appear to be sleeping with the enemy - permitting price rises beyond inflation

You sell off a utility to a private company and have to set up a watchdog to control them, says it all really.

JasonLVC wrote: »

2. Collusion. Most big business get around to colluding at some point and hope no-one finds out. and the utilities are just the same with one price rise from company A being followed the next week by company B.

And this is the reason the public aren't switching every other day. Theres no point, as soon as you switch to a cheaper supplier they put their prices up and you are no better off.

JasonLVC wrote: »

Same with BT - I don't use them, yet millions can't be bothered to switch to Sky or Cable - and so whilst the consumer behaves in this lazy manner, why should the supplier change their ways?.

I use BT, no cable here and can't afford sky (not that I would want it if I could)

As for suppliers changing their ways. people "allowing" themselves to be ripped of is no justification for company's ripping them off in the first place.

PS, I agree about the Labour government not doing anything to change things, but one government not changing things back is not an excuse for the previous government changing things in the first place.

emmalt

I'm with you Geordie Joe! Too much was sold off in the 80's/90's. Water, gas, electricity, BR, BT and council houses. Even my life long tory-supporting husband now realises that it was a bad idea. :rotfl: