Homes across North Warwickshire and Bedworth are paying more in profits to the energy companies. According to the energy regulator OFGEM, the profits made by the Big Six energy companies have leapt more than sixfold since 2010 to £53 from each household from £8 a household under Labour.
“When David Cameron took office, his free market views encouraged the energy companies to use the opportunity to make massive profits from consumers in the belief that government would not impose regulation,” said Mike O’Brien, a former energy minister 2004-5 & 2007-8. He said, “The energy market is dysfunctional. We need to freeze prices until 2017 to allow the market to be changed. Part of the problem has been the limits placed on Ofgem to intervene in the market.”
British Gas, SSE, EDF, Npower, ScottishPower and E.ON collectively made profits of £1.2 Billion last year, compared with a fraction of that, £221 million in 2009.
The average household bill rose by £168 in 2012, with at least £23 of the rise attributable to the companies taking greater profits, according to Ofgem.
The energy companies have found themselves under mounting pressure after a spate of price rises, which they argue was in response to rising costs.
Ed Miliband has called for a freeze on energy prices until 2017, while John Major called for a windfall tax.
Mike O’Brien said, “The energy companies are profiteering at the expense of customers. We can see from these figures that energy company bosses blamed green levies, which go to things like loft insulation for the less well-off, to cover up a profit grab. The energy market is broken.
“In a broken market switching supplier is not going to help consumers much, if all the companies have raised their profits.
“Energy bosses breathed a sigh of relief when the Tories came in because they knew the Tories believed in less government regulation. They took the opportunity to go for profit.
“When I was twice energy minister there were falling prices so it looked like the market was not a problem, but I believed that this sector was badly privatised. There was a lack of a strong regulator and Ofgem over relied on the market working properly, but the companies were too close to each other and too cosy with the regulator. The problems of the last three years have exposed the market as working against the interests of consumers. We can’t renationlise it but we can create a stronger regulator who works for the benefit of consumers. Until that change happens prices should be frozen.”