Energy firms could face criminal sanctions for manipulating the market as part of a package of measures unveiled by the UK Government.
Ed Davey, the energy secretary, also pledged to cut the amount of time it takes to switch supplier, to improve competition and drive down prices. He told MPs his “ambition” was to reduce it from five-weeks to 24 hours.
The move is the latest development in a fierce political row over energy prices, with the coalition responding to Labour’s call for a price freeze with a review of green taxes and the package unveiled yesterday.
The “big six” energy firms have come under intense fire after four of them announced average hikes of around 9% in recent weeks. Mr Davey revealed that his department would consult on introducing criminal sanctions for anyone manipulating the markets.
He said the reforms would also make it easier for consumers to switch and get the best deal, forcing energy companies to compete more actively for their custom.
“The energy industry needs to change to put consumers in control,” he said.
“That means making it easy for people to change supplier to save money, it means regular market assessments to check their behaviour, and it means tougher penalties for market manipulation and putting an end to opaque finances.
“We want to push energy companies to make switching quicker and easier, because consumer action can force suppliers to change their ways.”
Caroline Flint, Labour’s shadow energy secretary, said: “It’s another day, another policy that will do nothing to help people with their bills this winter.
“Hard-pressed energy customers struggling with the cost of living need action now, not endless reviews and consultations from an out-of-touch government that refuses to stand up to the energy companies.”
Mike Weir, SNP energy spokesman, said: “Consumers deserve to know exactly why their energy bills are rocketing at a time when the profits of the companies are also rising substantially.
“Real doubt has been raised as to the justification for the latest round of increases and we require absolute transparency.”
Scottish Federation of Housing Associations policy manager David Stewart said: “It’s appropriate that this energy review is being announced on Halloween, because energy prices are getting scary. It is time for governments to act to get a grip on this situation.”
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