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Ofgem Must Be Scrapped

Thursday, August 4, 2016

GMB Calls For Ofgem To Be Scrapped And For Government To Take Over As Regulator Accountable To Parliament

Government cannot duck taking the decisions needed to keep the lights on and ensure the decarbonisation of the sector says GMB

GMB, the union for energy workers, has commented on proposals from Ofgem announced today that it claims will deliver “a more competitive and fairer energy market.” The UK energy regulator released the proposals in response to a report from the Competition and Markets Authority in June (Friday, 24th June 2016).

Justin Bowden, GMB National Secretary for energy, said "Here we go again with more Ofgem tinkering over the pretence that a free market is possible in this sector.

Ofgem should be abolished and the Government itself should take over responsibility for regulating the industry so both are accountable to Parliament.

Government cannot duck taking the decisions needed to keep the lights on and ensure the decarbonisation of the sector. Government should also have powers to cap prices and limit profit levels and, where necessary, to finance and run power stations."

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Contact: Justin Bowden on 07710 618909 or GMB press Office on 07970 863411 or press.office@gmb.org.uk

Notes to Editors

1 OFGEM press release dated Wednesday, 3rd August 2016

Ofgem has today outlined our approach to the remedies the Competition and Market Authority (CMA) has recommended. We will implement these to deliver a more competitive and fairer energy market for all consumers.

The CMA’s two year investigation, which concluded last month, confirmed that two thirds of households are disengaged and paying over the odds for their energy compared to those who have switched tariff.

The remedies are aimed at freeing up competition and innovation in the market to drive down bills and improve service for all consumers not just a minority.

Those on pre-payment meters, who are among the most vulnerable and least likely to switch, will be protected by an interim price cap which will save them around £75 a year from next April.

Ofgem will work closely with suppliers to help disengaged customers, who remain on expensive standard variable tariffs, to shop around and save money. In particular it will trial more effective prompts on customers’ bills to encourage them to compare tariffs. Next year Ofgem will pilot the database service, which will allow suppliers to offer disengaged customers better value deals. Protecting the privacy and security of consumers’ data remains a priority.

Ofgem has published a separate consultation today on the CMA’s proposals to remove parts of its Retail Market Reforms so consumers can enjoy a wider choice of innovative good value deals. Ofgem has also consulted on its approach to the CMA’s recommendation to remove the requirement on price comparison websites to display all the tariffs on the market.

Combined with other changes already happening, such as smart meters and faster switching, these remedies provide an opportunity to transform the energy market. Ofgem will be continuing our Be An Energy Shopper marketing campaign this autumn encouraging consumers to save around £300 a year by shopping around.

Ofgem’s annual review of the retail energy market, also published today, confirmed that the majority of consumers who do not engage in the market are losing out. It also found that the proportion of people on expensive standard variable tariffs has dropped from 69% last year to 66% in March this year as switching rates increase.

Ofgem Chief Executive, Dermot Nolan said: “The CMA’s final report is a watershed moment for industry and consumers and points the way to a fairer and more competitive future. I call on energy companies and consumer groups to seize this opportunity.”

2 GMB press release dated Monday, July 29, 2013

GMB Calls For Ofgem To Be Scrapped And For The Government To Take Over As Regulator Accountable To Parliament

It is clear OFGEM have been a miserable failure in terms of looking after the interests of customers.

GMB the union for energy workers commented on the Energy and Climate Change Committee report on OFGEM published today 29th July 2013. See notes to editors below.

Gary Smith, GMB National Secretary for energy said, “This report shows that OFGEM must go and a different regulatory framework put in place. The government its self should take over as the regulator and be accountable to Parliament for that role.

The Committee is right to be "astonished at OFGEM's failings". It is clear OFGEM have been a miserable failure in terms of looking after the interests of customers. But given their failings the answer isn't to give them more responsibility but to scrap them.

OFGEM have put bureaucracy in the way of delivering energy efficiency measures like the Energy Company Obligation (ECO). The committee wants to see money spent on energy efficiency measures. The fact is there are hundreds of millions of pounds that have gone unspent because of OFGEM. This is money that could have been spent reducing the poorest people's energy bills this winter.
 
The Committee registers concern at the projected increase in wholesale electricity prices for those who depend on electricity only for heating. The fact is OFGEM have slashed investment in the replacement of gas mains by nearly 20%. The big cuts OFGEM are imposing on the gas industry are bad for customers, they won't reduce bills by a penny and they are bad for safety and jobs.”

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