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Chris Huhne to 'get tough' on energy costs


Following his speech to the Lib Dem conference, Energy Secretary Chris Huhne is to crack down on energy companies offering misleading and confusing deals with regards to energy prices, particularly concerning the "Big Six" - British Gas, Scottish Power, Scottish and Southern, Npower, E.On and EDF.

In particular, he wants energy companies to be obliged to tell customers if they could buy more cheaply on a different tariff, over concerns that a lot of customers do not fully understand how they are charged for their energy use.

"It's not fair that big energy companies can push their prices up for the vast majority of their consumers, who do not switch, while introducing cut-throat offers for new customers that stop small firms entering the market."

Certain companies offer much better deals online to new customers, where competition is rife, whereas existing customers, of course not made aware of this process, suffer higher prices for the same goods. To prevent this, Huhne proposed greater powers to Ofgem, who can already fine companies up to 10% of their annual turnover. This could prove costly - Centrica, parent company of British Gas, has a turnover of £14 billion as of 2009.



Image Source: The Telegraph


Cynics may highlight that oil price rises cause a lot of issues politically, because they have such widespread effects on the voting public. So many household items rely on transport, or oil use directly or indirectly in their manufacturing processes. High prices at pumps make voters grumble when they fill up their cars, as do sky-rocketing food costs, particularly at a time of slow economic growth. Huhne's speech is popular for this reason - our wallets are all suffering, so a politican standing up and "taking our side" is bound to be popular.

In an age when information is increasingly abundant, with the internet full of comparison websites ( such as our own solar panels one), it could be argued that consumers are increasingly armed in the battle against big companies. This speech may be what we want to hear, but are these measures necessary, or are they an appeal to the electorate?

Let me know what you think! Email me james@comparecompanies.co.uk - I'll publish the most interesting comments.