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Energy Market

Volume 455: debated on Monday 15 January 2007

To ask the Secretary of State for Trade and Industry what representations he has made to energy retailers requesting that they reduce prices in line with falling wholesale costs of energy on world markets; and if he will make a statement. (114276)

Ofgem, the independent regulator, is responsible for regulation of the UK gas market, operating within a framework set by Government. We welcome the fact that Ofgem is calling for the recent reductions in the wholesale price of gas to be passed on to consumers. Ofgem indicates, however, that there can be a time lag. Within this competitive market, individual pricing decisions are a matter for each of the energy companies, and the Government cannot direct Ofgem as to its approach on prices.

The regulatory framework provides for Ofgem to fine companies up to 10 per cent. of annual worldwide turnover if it finds evidence of anti-competitive behaviour. Ofgem can also refer the market to the Competition Commission if it finds evidence that competition is not working.

To ask the Secretary of State for Trade and Industry what (a) regulatory and (b) self-regulatory protection is afforded to (i) domestic and (ii) small business consumers in the energy market. (114282)

Domestic energy customers are protected by general consumer law, by specific regulations overseen by the Office of Gas and Electricity Markets (Ofgem), and by industry self-regulation in areas such as doorstep selling, billing and disconnections.

As in general consumer law, business energy customers do not have access to the range of protection available to domestic customers, although, like domestic customers, they may seek assistance from the statutory consumer body, Energywatch, as well as seeking redress through the courts.