Energy firms found guilty of rigging wholesale gas and electricity prices could face prison time under new proposals published today by Ed Davey.
The energy and climate change secretary is hoping to clamp down on unfair practices in the energy market. The government estimates that households spend £63 billion a year on heating, power and transport, more than 7% of all spending. A recent survey by Kingfisher group showed that escalating energy bills are now homeowners’ number one fear.
The proposed laws would mean that anyone found guilty on rigging energy prices could face up to two years in prison. The new law would make it ‘a criminal offence to fix the price of energy at an artificial level or use insider information to buy or sell energy to the wholesale market’.
Commenting on the proposals, Davey said: “Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.
“The government is doing everything it can to help consumers by increasing market competition to drive prices down. We have also set up the first ever annual competition assessment, which has led to the first ever referral of the sector to the competition authorities.”
The government said that the introduction of criminal sanctions are part of its wider move to “safeguard consumers” and break “the stranglehold of the Big Six”.
Rachel Fletcher, senior partner, markets, Ofgem, concluded: “We want the strongest possible deterrents in place to guard against market manipulation and insider trading. We put forward the case to government for greater powers to take action if needed, and we welcome this consultation.”
The government is currently consulting on the proposals with a response expected this autumn. The proposed new laws predicted to come into force in spring 2015.