Financial News

  • 12 August 2014, 12:39

Ofgem Rejects Blame For High Energy Bills

Ofgem has rejected claims that it is partly to blame for high energy bills.

It comes after five former energy regulators said the watchdog may be responsible for rising bills due to the poor structure of its regulation since 2008.

The Competition and Markets Authority (CMA) is currently investigating the energy sector after Ofgem said households are paying too much for gas and electricity.

The former regulators told the CMA that Ofgem played a part in weakened competition in the energy market.

They said that intervention by Ofgem has reduced the number of deals on offer, meaning "customers are less interested in shopping around".

But in a statement, the watchdog said: "Many of the current problems with retail competition in the energy market were showing before 2008 and the regulatory and policy environment has changed significantly since then.

"Our reforms to make the market simpler, fairer and clearer for consumers have been in place since earlier this year with the aim of tackling some of the issues affecting competition."

But while the CMA conducts its review of the energy sector, former regulators including Stephen Littlechild and Sir Callum McCarthy expressed concerns over its independence.

Ofgem said: "Referring the energy market to the CMA will help to ensure that no stone is left unturned to make sure that competition is bearing down as hard as possible on prices.

"We consider it essential that their review is independent so it can answer pressing questions and provide remedies to make the market work better for consumers.

"While it's up to the CMA to decide which features of the market to investigate, we have made it clear that we would fully expect them to look at the regulatory framework and the actions we have taken to intensify competition and protect consumers."

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