31st Oct 2013 14:24
LONDON (Alliance News) - UK Energy Secretary Ed Davey Thursday promised to cut the time it takes to switch energy suppliers towards his ambition of 24 hours, part of an attempt to increase competition and bring down prices.
"Eon, SSE and Scottish Power and a number of independent suppliers including Good Energy, Ovo Energy and Cooperative Energy have accepted my invitation for urgent talks over the next months on how we can dramatically speed up switching," Davey told MPs.
He was explaining a review of energy prices and competition in the commons previously announced by UK Prime Minister David Cameron.
"I want five-week switching to come down to one-week switching and then I want to go faster still," he told MPs.
But he added: "This will not happen overnight. We could announce 24-hour switching and then suppliers will say, 'OK, we will put up our prices to cover costs.' That cannot and will not happen."
In response, Labour said action was needed on the energy prices now, and the government's response to energy companies was "too weak".
"We don't need another review, we need action - action to freeze people's energy bills and fix this broken market," Shadow Energy Secretary Caroline Flint said. "Three million elderly people wont be able to stay warm in their homes this winter."
The decision comes after the UK's major energy companies were brought before UK lawmakers to explain why they were blaming higher wholesale energy prices for recent customer price hikes.
Half of the big six UK energy suppliers have raised prices in recent weeks, with the rest expected to follow in coming weeks. They've blamed a combination of higher wholesale prices, rising costs for maintaining infrastructure, and the cost of the government's green energy taxes.
RWE npower increased its prices an average of 10.4%, Centrica's British Gas an average of 9.2% and SSE increased prices an average of 8.2%.
The increases have prompted a storm of protest from consumer groups, and politicians of all parties. The protests were stoked when UK energy market regulator Ofgem said that wholesale prices have risen by less than the rate of inflation and that its data suggests that wholesale electricity and gas together have risen by just 1.7% over the last year.
Energy prices are turning into a political football ahead of the next election. Dwindling household budgets are set to become one of the main features of party campaigns as wage growth remains low while things like energy prices increase at rates well above inflation.
Opposition leader Ed Miliband has said Labour will freeze energy prices for two years if it is elected to power in 2015, prompting energy companies to warn that they may not be able to fund investments and warnings from critics who say companies may raise prices even more ahead of any freeze.
By Tom McIvor; [email protected]; @TomMcIvor1
Copyright 2013 Alliance News Limited. All Rights Reserved.
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