Newspaper article Evening Chronicle (Newcastle, England)

UK'S Big Six Energy Firms Feel the Heat; NORTH MP HITS OUT IN ROW OVER SUPPLIERS' PROFITS

Newspaper article Evening Chronicle (Newcastle, England)

UK'S Big Six Energy Firms Feel the Heat; NORTH MP HITS OUT IN ROW OVER SUPPLIERS' PROFITS

Article excerpt

Byline: MIKE KELLY Reporter mike.kelly@trinitymirror.com

FUEL poverty campaigners and a North East MP have joined the simmering row over claims the 'Big Six' energy suppliers are making larger profits than they have admitted to.

Business Secretary Greg Clark is to investigate the claims made today that gas and electricity firms may be making six times more than they publicly state.

The trade body Energy UK claimed the report was "a misrepresentation of the facts".

Peter Smith, director of policy of the National Energy Action which has offices in Newcastle, said the claims highlighted ongoing issues over tariffs in the energy market.

He said a separate report last week revealed that 58% of all energy customers are stuck on standard variable tariffs with a Big Six provider, the default and usually most expensive tariff, four months after the Competition and Markets Authority (CMA) concluded its two-year market investigation.

It said energy companies are failing to help their customers off these more expensive tariffs and the inquiry found consumers are collectively overpaying by more than PS1bn. Mr Smith said: "The CMA analysis demonstrated consumers could have paid PS1.7bn a year less for their gas and electricity bills had the market been working effectively.

"NEA's particular focus is on vulnerable energy consumers, and in particular those on the lowest incomes who struggle to pay for this essential service."

The 'Big Six' are British Gas, EDF Energy, E.ON UK, npower, Scottish-Power and SSE.

Mr Smith added: "In the short term, the regulator Ofgem, the UK Government and energy industry must work together to ensure vulnerable consumers do not continue to be bamboozled by confusing and difficult-to-compare tariff choices."

The allegations today were based on a report commissioned by Energy UK from accountancy firm PWC.

According to the regulator, Ofgem, UK energy firms make a 4% profit margin on the price of a typical dual fuel bill.

But using figures in the PWC report, a national newspaper said that suppliers could actually be making a 24% profit margin.

In the report, PWC said the average cost of supplying energy to a household - covering the cost of wholesale energy and sending bills - was PS844 a year. …

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