Aug 29

Energy licenses to change

Labour party says it will rescind energy licenses to safeguard consumers

The Labour party has confirmed that it will authorise a new regulator the clout to withdraw energy company licenses if consumers are ill-treated, if it wins the next general election.

Caroline Flint, who is the shadow energy secretary, has stated that a future Labour government would authorise a new watchdog to remove licenses if a “serious and deliberate breaches of their license conditions which harm the interests of consumers” occurred.

The UK Labour party has realised that penalising utilities for flouting terms is not altering behaviour and Ms Flint, who declared in 2012 that the party intends to change the existing regulator, Ofgem, if it won the election, will insist harder fines are required as utility companies “too often seem to view the regulator’s fines as a cost of doing business, not as a warning to get their act together”.

“The public has the right to be treated fairly by energy companies. Where firms fail to meet these standards, there must be tough and decisive action,” she said.

The energy industry is still looking at 16 investigations into its practices, not put off by fines adding up to over £87m that it has paid out since 2001, Ms Flint maintains, quoting figures taken under the freedom of information act.

Not surprisingly, the Conservatives says that this is all a “gimmick” and stated that the government in 2013 gave Ofgem extra powers to make the energy companies recompense consumers for mis-selling and charging too much.

Under existing rules, the Ofgem has the powers to take away licenses in special circumstances, including where companies did not meet enforcement orders.

The regulator said the statement seemed to set out a way for an addition of its powers and that it was “always interested to work with government on any new powers or refinements to existing powers that would help to protect consumers”.

The Labour Party and Ofgem disagree over the numbers on fines.

The regulator insists it has handed out £102m in fines since 2010 and maintained its action against mis-selling recently had enhanced the circumstances for consumers.