Energy secretary Ed Davey criticises high energy tariffs‏

At today’s annual Energy UK conference, energy secretary Ed Davey used his speech to hit out at the “big six” energy suppliers, accusing them of treating consumers like “cash cows to be squeezed in the pursuit of a higher return for shareholders”.

Davey said the industry was facing its “Fred the shred moment,” with reference to Fred Goodwin, the discredited former head of Royal Bank of Scotland, when the bank collapsed in 2008. He drew the comparison because he says consumers see the energy industry as “a reflection of the greed that consumed the banks”.

He claimed that “trust between those who supply energy and those who use it is breaking down,” and added that “it is so difficult for people to work out what exactly they are paying for”.

A survey carried out by consumer group, Which? last month found that 59% of those polled did not trust energy companies, making it “the most distrusted of all consumer industry sectors”. The survey also found energy is the “top of the list of consumer worries,” with 51% concerned about price increases.

Davey’s attack came on the day when EDF became the latest energy giant to announce price increases, with the French firm saying its prices would rise by an average of 3.9%. Mr Davey said he “welcomed the fact it was a lot lower than other big six companies who’ve announced their price rises” on Sky News.

Energy UK responded to Davey’s comments by calling his comments a “tit for tat Punch and Judy show of insults”.

Shadow energy secretary Caroline Flint was less impressed with EDF’s announcement, telling Sky News: “What EDF have said today is that they will only increase their prices to the amount they have announced today if the Government gets rid of its obligations to support people with insulation and also renewables.”

Flint also said Labour would “freeze bills and reform the market,” adding “in no way can it be said that customers are getting fair bills, because the market’s broken and wholesale pricing and the way it’s set is broken too”.

Joe Turnbull