Centrica Chief Executive Supports CMA Inquiry

Centrica Chief Executive Supports CMA Inquiry

Laidlaw called the inquiry “a matter of real public interest. First of all—and this may surprise some people—we have told Ofgem that we welcome its proposal to refer the sector to the CMA. We are not saying this because we believe that the energy market is broken. Far from it…The reason we welcome the proposed inquiry is because we recognise that there is an urgent need to repair customer trust and confidence. A rigorous, comprehensive, and independent assessment of the state of competition can play a key part in that.”


The executive stresses the need for a comprehensive investigation. “The primary cause of customer concern is the affordability of bills. The increases we have seen in recent years have been driven by…costs external to our business [higher commodity prices, network charges, government levies]. In contrast, the controllable costs of British Gas have been broadly flat despite the investment we are making in smart meters, and our profitability has been declining. An investigation needs to consider the impact of all these costs on retail prices and how regulation has affected the behaviour of energy suppliers.”

Laidlaw acknowledges that any inquiry alone will not restore customer trust. “Service levels must continue to improve. We need more transparency and scrutiny of all parts of the bill, including network charges. And we should consider whether the energy bill is the right way to pay for the escalating cost of government environmental and social policies.”

Ladilaw concludes, “We recognise that the CMA may well decide that network charges and government-mandated levies are outside the scope of the inquiry. So we are calling for a wider debate about these additional costs, and whether they are justified. We want this debate to happen now, rather than wait for the outcome of the CMA inquiry. And we are urging Ofgem to publish an audit of current and projected Government policy costs.”

 

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