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by Liam Kirkaldy
08 July 2015
Energy bills see huge rise over decade

Energy bills see huge rise over decade

Electricity prices have risen by around 75 per cent and gas prices by around 125 per cent in the last decade, according to a review by the Competition Markets Authority (CMA).

The CMA led a year-long investigation into the energy market, finding that regulatory interventions have failed to boost market competition or lower prices.

The review found that for the poorest 10 per cent of households energy bills make up around 10 per cent of their total expenditure, leading the CMA to call for greater transparency on the decisions affecting bills.


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It warned that future prices will be heavily influenced by decisions over generation capacity and renewables policy.

The report found that customer disengagement hindered the market from operating efficiently, with customers unaware of which deals are available and confusing and inaccurate bills, along with the real and perceived difficulties of changing suppliers, stopping customers getting the best price.

Roger Witcomb, chairman of the energy market investigation, warned that customers being reluctant to switch providers allows energy firms to take them for granted.

He said: “We don’t think that regulatory interventions have always benefitted competition and customers.

“Technical issues around measurement of consumption and pricing and the slow process in introducing changes that could bring widespread benefit can also play a part.

“There is an issue with trust in this market, and one of the most effective ways of restoring that is through transparency in all parts of the market, be it in the implementation of policy, in regulation or in energy company accounts.”

Gary Smith, GMB national secretary for energy, said "This CMA report confirms that there is no real market in the energy sector. The tinkering proposed by the CMA propose won't work.

“Whilst the heat on energy prices is off at the moment, the long term trend, as the demand for energy continues to increase, is upwards.

“As we fiddle about trying to fix a market that doesn't actually exist we are losing generating capacity and can't get new powers stations built.”

Lewis Macdonald, Scottish Labour’s energy spokesperson, claimed the report confirms his party’s claim that the energy market is “broken”.

He said: “The Big Six have been overcharging households by more than a billion pounds every year.

“Wholesale costs are now at a five-year low but this is still not being reflected in household bills.

“The CMA itself says today that it will consider ‘a transitional price cap on the most expensive tariffs.

“Even the regulator, reporting to Tory Ministers, agrees with Labour's argument that the only way to deal with the worst excesses of the Big Six power companies is to put a cap on prices.”

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