Power firms 'must face licence axe'

Power firms 'must face licence axe'

Caroline Flint accused the Government of presiding over a 'broken energy market'

Caroline Flint accused the Government of presiding over a 'broken energy market'

First published in National News © by

A Labour government would give a new energy regulator the power to revoke energy companies' licences to help protect the interests of the public, the party announced today.

Shadow energy and climate change secretary Caroline Flint accused the Government of presiding over a "broken energy market" and said Labour would hand a tough new regulator the capability to cancel energy companies' licences where there were repeated instances of the most "serious and deliberate breaches of their licence conditions which harm the interests of consumers".

Ms Flint is due to visit the battleground seats of Reading East and Reading West later today where she will speak on the issue.

Figures obtained under the Freedom of Information Act, she claimed, showed energy companies had continued to "mistreat their customers" and face another 16 probes into mis-selling, poor customer service and other bad practice, despite Ofgem issuing 30 fines, totalling more than £87 million since 2001.

Under Labour's wider reforms to "fix" the energy market, Ms Flint said, the regulator would be charged with producing an annual scorecard for energy suppliers, reporting on the company's performance and identifying any possible areas of concern.

Outlining "the choice" faced by the electorate at next year's general election, Ms Flint claimed household energy bills had risen twice as fast as inflation and four times as fast as wages since 2010, while UK energy prices had risen faster than almost anywhere else in the developed world since Labour lost office.

She said: "The public have a right to be treated fairly by energy companies. Where firms fail to meet these standards, there must be tough and decisive action. Too often energy companies seem to view the regulator's fines as a cost of doing business - not as a warning to get their act together.

"Of course consumers must be compensated - but if energy companies persist in mistreating their customers they must know their licence could be on the line."

Labour said that according to information disclosed by Ofgem under the Freedom of Information Act, Ofgem currently had 12 investigations ongoing and a further four at informal review stage.

She added: "These figures lay bare the full scale of the cost-of-living crisis and David Cameron's failure to tackle rip-off energy bills. On David Cameron's watch, energy bills in Britain have risen twice as fast as inflation, four times faster than wages and faster than almost any other country in the developed world. Households cannot afford another five years of this.

"At the next election there will be a real choice between another five years of rocketing energy bills, rip-off tactics and poor customer service under the Tories - or Labour's plans to freeze energy bills until 2017, saving the average household £120, and reform the energy market for the future."

Responding, a Conservative spokesman said: " We'll take no lectures from the party that brought Britain's economy to its knees. Labour left our country with a broken energy market and huge taxes on bills - meaning the number of people in fuel poverty nearly doubled in Labour's last five years.

"We've been taking action to put this right. We've taken £50 off the average bill by rolling back green levies. We're carrying out a full, independent inquiry to fix the broken market we inherited. And we're forcing energy companies to simplify bills so people can be sure they are getting the best deal.

"Only our long-term economic plan will deliver the tax cuts and infrastructure we need to keep bills down, keep the lights on and secure Britain's energy future. All Labour offer is more of the same: higher taxes and unworkable gimmicks which will put prices up in the long run."

An Ofgem spokesman said: "Ofgem is always interested to work with government on any new powers or refinements to existing powers which would help to further protect consumers.

"Ofgem does currently have powers to revoke licences in certain specific circumstances, including where companies have failed to comply with particular enforcement orders we have set requiring them to change or stop behaviours."

A spokesman for Energy UK, the trade association for the energy industry, said: "The regulator already has strong penalties for companies found to be in breach of licence conditions.

"Customer service is always at the heart of what we do and having a strong set of licence conditions is essential for the protection of consumer rights and to support the positive moves the energy industry has already taken.

"Energy UK wants compliance to be a key part of the regulator's role, creating a regime and industry that always puts customers first and protects their rights."

A Liberal Democrat source added: "Labour's temporary price freeze is a con. What's to stop the Big Six hiking up prices the moment it ends?

"Labour created the Big Six and a price freeze would threaten the smaller suppliers who have increased under this Government and offer real competition, regularly topping the best buy tables.

"The regulator already has the power to revoke an energy supplier's licence and Lib Dems in Government have given Ofgem additional powers for consumers to be directly compensated when there's been wrongdoing.

"Consumers deserve long term solutions not temporary cons."

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