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'Big six' face competition inquiry 'Big six' face competition inquiry
(35 minutes later)
Regulators will investigate whether the "big six" UK energy suppliers are preventing effective competition in the UK energy market.Regulators will investigate whether the "big six" UK energy suppliers are preventing effective competition in the UK energy market.
The investigation will be by the Competition and Markets Authority (CMA) and is expected to take 18 months.The investigation will be by the Competition and Markets Authority (CMA) and is expected to take 18 months.
Regulators have spent three months looking at how vigorously the six largest suppliers compete, and how they can remove uncertainty from the market.Regulators have spent three months looking at how vigorously the six largest suppliers compete, and how they can remove uncertainty from the market.
Regulators also looked at market share and how new entrants can compete.Regulators also looked at market share and how new entrants can compete.
Last autumn the government ordered a review of competition in the energy retail sector following a public outcry over high prices.Last autumn the government ordered a review of competition in the energy retail sector following a public outcry over high prices.
The big six - SSE, Scottish Power, Centrica, RWE Npower, E.On and EDF Energy - account for about 95% of the UK's energy supply market.
But the Ofgem report does not accuse the major energy firms of colluding over prices. However, it does find "possible tacit co-ordination" on the size and timing of price rises.
'Clear the air''Clear the air'
Ofgem is referring the market to the CMA - the new competition body - "to consider once and for all whether there are further barriers to effective competition".Ofgem is referring the market to the CMA - the new competition body - "to consider once and for all whether there are further barriers to effective competition".
Ofgem also says profit increases and recent price rises have intensified public distrust of suppliers and have also highlighted the need for a market investigation "to clear the air".Ofgem also says profit increases and recent price rises have intensified public distrust of suppliers and have also highlighted the need for a market investigation "to clear the air".
Dermot Nolan, Ofgem chief executive, said: "The CMA has powers, not available to Ofgem, to address any structural barriers that would undermine competition.Dermot Nolan, Ofgem chief executive, said: "The CMA has powers, not available to Ofgem, to address any structural barriers that would undermine competition.
"Now consumers are protected by our simpler, clearer and fairer reforms, we think a market investigation is in their long-term interests. ""Now consumers are protected by our simpler, clearer and fairer reforms, we think a market investigation is in their long-term interests. "
Political tussle When asked on Radio 4's Today Programme whether there would be a breakup of the six largest suppliers Mr Nolan said: "It's possible, (but) I couldn't guess what the Competition and Markets Authority will do".
He said the investigation will take some time, so meanwhile, "we'll be keeping the pressure on" suppliers.
'Restore confidence'
The energy sector has been at the centre of some strident political debate since last summer.The energy sector has been at the centre of some strident political debate since last summer.
This began with Labour leader Ed Miliband's party conference speech, in which he pledged to freeze energy prices for 20 months if Labour were elected.This began with Labour leader Ed Miliband's party conference speech, in which he pledged to freeze energy prices for 20 months if Labour were elected.
He also vowed to abolish the current energy regulator, Ofgem, and replace it with a new regulatory regime that ensured consumers got a "fair deal".He also vowed to abolish the current energy regulator, Ofgem, and replace it with a new regulatory regime that ensured consumers got a "fair deal".
This was followed by a series of measures aimed at reducing green levies - and, in turn, customer bills - brought in by the government.This was followed by a series of measures aimed at reducing green levies - and, in turn, customer bills - brought in by the government.
The road towards a full inquiry into competition in the market was then paved by Ed Davey, the energy secretary. In February, he wrote to regulators to say that the profit margins made by the six major energy suppliers in the UK were higher than previously thought.The road towards a full inquiry into competition in the market was then paved by Ed Davey, the energy secretary. In February, he wrote to regulators to say that the profit margins made by the six major energy suppliers in the UK were higher than previously thought.
E.On UK chief executive Tony Cocker said an investigation was the only way "to restore full public confidence to the energy sector and depoliticise the whole issue".
What do you think of the findings of the report? Are you happy with your current energy supplier? Is enough being done to increase competition?What do you think of the findings of the report? Are you happy with your current energy supplier? Is enough being done to increase competition?
Email us at haveyoursay@bbc.co.uk adding 'OFGEM report' in the subject heading and include your contact details.Email us at haveyoursay@bbc.co.uk adding 'OFGEM report' in the subject heading and include your contact details.