Energy regulator is not a ‘toothless tiger’
Head of Ofgem, Andrew Wright has defended the energy regulator against accusations of ‘feeble regulation’
In a speech to MPs on the Commons energy and climate change committee, Wright accepted that rising gas and electricity prices had significantly affected the public’s perception of energy companies.
Wright was speaking just one day after it was revealed that the per customer profit margin of the big six energy suppliers, had increased by 77% in just one year.
Ofgem: ‘The market is not working well’
Speaking on consumer dissatisfaction with rising energy prices, he said: “I completely understand why people feel frustrated and angry about rising energy bills.
“Prices have more than doubled over the last 10 years at a time when incomes have been squeezed, and consumers are not convinced that price increases that they see are either fair or justified.
“Consumers have a perception that the market is not working well and that’s something that we agree with. We think the retail market is not working as well as it should do.”
Politicians need to consider whether policy negatively affects consumers
Wright added that he felt politicians had a duty to discuss energy prices, but stopped short of backing Labour’s plan to freeze energy prices.
“The sort of things we would consider are, does it have an adverse impact on consumers and on the investment that’s needed,” he said.
“It is obviously necessary to allow companies to recover the revenues that they need to be able to run their businesses effectively. They should have no guarantee of profits but an efficient business serving customers should be able to recover the costs that they incur. So any arrangement that doesn’t allow them to do that potentially puts at risk investment in the industry.”