The Government is to launch a “proper competition test” to establish whether the energy market can be made more competitive, David Cameron has said.
Announcing the move at Prime Minister’s Questions, Cameron also signaled he wanted to “get to grips” with “green” regulations which were driving up energy bills.
“I can tell the House today that we will be having a proper competition test carried out over the next year to get to the bottom of whether this market can be made more competitive,” he said.
The Prime Minister’s intervention came after former prime minister Sir John Major yesterday called on the Government to impose a windfall tax on the profits of the energy companies.
Downing Street said that details of the competition review will be set out next week in the annual energy statement to the House of Commons by Energy Secretary Ed Davey.
An annual review of competition in the energy sector will be conducted by regulator Ofgem, the Office of Fair Trading and the new Competition and Markets Authority. The first review is expected to begin within weeks and report next year, said the Prime Minister’s official spokesman.
It will look at issues affecting competition and consumers, ranging from prices and profit levels to barriers to new entrants in the market, as well as how companies engage with customers.
“With regard to the charges that are part of people’s bills, we are of course looking across the board at what more Government can do to help customers and consumers,” said the spokesman.
The spokesman declined to give any detail of sanctions which energy companies might face as a result, but said: “It would be wrong at this stage to rule anything out in terms of how we get more competition into the market.”
The spokesman said the review was agreed by both Conservative and Liberal Democrat sides of the coalition and insisted that the Government was not giving up its claim to be “the greenest ever”.
The Prime Minister’s ambition to “roll back” green levies has also been discussed with Liberal Democrats over recent weeks, and details will be released in Chancellor George Osborne’s Autumn Statement on December 4.
Downing Street sources said that, if there was no policy change, green levies could rise from the current £112 to £194 – or 14% of the typical household bill – by 2020. Mr Cameron wants action to reduce the impact of the levies, the source said.
Labour said that £67 of the £112 levies were accounted for by measures introduced by the coalition.
Recommended for you
