Labour pledges to remove bad energy firms’ licences
Labour says it will give a new regulator power to remove energy firms’ licences, if it wins the next election.
It says the new rule would apply in cases of “repeated instances of the most serious and deliberate breaches of their licence conditions”. The party claims their pledged action would protect consumer interests. But the current regulator, Ofgem, said it already had the power to remove licences from energy firms in certain circumstances. “Where firms fail to meet standards there must be tough and decisive action,” said Caroline Flint, the shadow energy secretary.
Labour has already promised to abolish Ofgem, and put a new regulator in place. An Ofgem spokesman said it already had powers to revoke licences in “specific circumstances, including where companies have failed to comply with particular enforcement orders.” However, a Labour spokesman said the current rules meant a firm could repeatedly break the law as long as it paid the fines issued by Ofgem. “That’s the kind of regulatory gap we want to address,” he said.
Energy UK, the trade body for the industry, said it already had strong penalties for companies found to be in breach of licence conditions. “Having a strong set of licence conditions is essential for the protection of consumer rights,” it said.
Labour also revealed figures, obtained under the Freedom of Information Act, which it said showed 16 energy companies faced probes into mis-selling, poor customer service and other bad practices. Ms Flint said the figures showed that the current government had “presided over a broken energy market”. “On David Cameron’s watch, energy bills in Britain have risen twice as fast as inflation, four times faster than wages and faster than almost any other country in the developed world,” she added.
In response, a Conservative spokesman said the government was already taking action to address the issues raised, including forcing energy firms to simplify bills. “We’re carrying out a full, independent inquiry to fix the broken market we inherited,” he added.