Minister urges more competition in energy market
The big six energy companies should be exposed to more competition from smaller firms according to Energy Minister Malcolm Wicks. He expressed concern that there might be barriers stopping new entrants to the energy market and said he would be raising the issue with the industry regulator Ofgem.
Speaking to the Commons Business, Enterprise and Regulatory Reform Committee, Mr Wicks rejected any suggestion that the largest companies colluded over price hikes. But he said there was a question about whether six companies represented "enough competition".
"What I am particularly interested in is if there are barriers to new entrants which shouldn't be there," he told MPs. "I think in a competitive market like this at the moment - when wholesale prices are going up, when there are new forms of energy coming into the system from renewables, when there are new ideas about decentralised energy systems, combined heat and power and all of that.
"When that's going on, I would rather like to see more competition in the market. I would rather like to see new entrants and some of them could be relatively small."
Wicks said that, without interfering with Ofgem's independence, he would be discussing the issue with the regulator. Giving evidence to an inquiry into energy prices, Wicks said he was also concerned about "mis-selling" by suppliers and the difficulties preventing some people from switching.
He said there was evidence that most people who switched supplier ended up with a better deal - but added that it should not be assumed that everybody had access to a "flat-screen computer" and the wherewithal to keep track of prices.
"I'm aware that some of our more vulnerable constituents can be vulnerable to mis-selling and I want to satisfy myself that the codes in place for that are rigorous enough," he said, adding that he would be raising the issue with companies.
On the issue of switching, he added: "Many of our constituents are nowhere near a computer, and have so many issues on their mind that they are not readily able to make use of switching."
Image: Energy Minister Malcolm Wicks