Oct 23 2013
The Government is to launch a "proper competition test" to establish whether the energy market can be made more competitive, David Cameron has said.
Announcing the move at Prime Minister's Questions, Mr Cameron also signalled he wanted to "get to grips" with "green" regulations which were driving up energy bills.
"I can tell the House today that we will be having a proper competition test carried out over the next year to get to the bottom of whether this market can be made more competitive," he said.
Mr Cameron's intervention came after former prime minister Sir John Major yesterday called on the Government to impose a windfall tax on the profits of the energy companies.
Challenged by Sir John's remarks by Labour leader Ed Miliband, Mr Cameron said: "I want more companies, I want better regulation, I want better deals for consumers. But yes, we also need to roll back the green charges that he put in place as energy secretary."
His comments threatened to put him at odds with his Liberal Democrat coalition partners who have made clear they are firmly opposed to any move to get rid of existing green tariffs.
Amid heated exchanges, Mr Cameron lashed out at the Labour leader, telling him: "Sir John Major is a good man, you are acting like a conman."
He said: "He left us a market with just six players, we have already seen seven new energy companies come into that market.
"So we need an annual audit of competition to make this market more competitive, something he never did when in office.
"And we need to roll back the costs that have been imposed on people's energy bills, part of which he was responsible for."
The Prime Minister was later rebuked by Speaker John Bercow for calling Mr Miliband a "conman".
Downing Street yesterday appeared to pour cold water on Sir John's call for a windfall tax, saying merely that it was an "interesting" suggestion.
Mr Cameron said the former premier had been "absolutely right" however to say that energy bills had reached a "completely unacceptable level" and that action was needed.
Mr Miliband said Sir John had exposed the Prime Minister's unwillingness to stand up to the energy companies.
"Many people face the choice this winter between heating and eating. These are the ordinary people of this country who this Prime Minister will never meet and whose lives he will never understand," he said.
Earlier, another Tory grandee urged Mr Cameron to get tough with the big energy companies if it was shown they were using their monopoly powers to make excess profits.
Former social security secretary Peter Lilley said the Government should be prepared to hand greater powers to the industry regulator, Ofgem, if an inquiry by the Commons Energy and Climate Change Committee found the companies were abusing their domination of the market.
"We have got to have a proper system that makes sure that the energy companies do not raise prices more than is justified by investment and rising costs," he told the BBC Radio 4 Today programme.
While he rejected the idea of a windfall tax - warning it would simply add to the cost of energy - he said both Sir John and Mr Miliband, who is proposing a temporary price freeze, were right to try to address the issue.
"They are both sensibly trying to propose something that will help people with their energy bills, because that's what matters most to people the lower down the income tree you go and the further north in the country you go," he said.