The Energy Secretary warned energy companies the situation in the Middle East was not an excuse to ‘rip people off’, and that the regulator which can issue fines had his ‘full support’
Energy companies have been warned not to rip off customers as war in Iran pushes up the prices of fuel and gas.
Energy Secretary Ed Miliband backed the regulator which can issue fines just hours after petrol retailers threatened to withdraw from a meeting with the government over accusations of price gouging.
Ministers had promised to intervene if companies engage in unfair practices that would hit customers facing a rise in the price of home heating oil, which is not covered by Ofgem’s energy price cap.
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Speaking to this newspaper, Mr Miliband said: “What’s important in this situation is that your readers know that we are going to fight that corner, and that’s what we’re going to do. Making clear whether it’s the heating oil companies or the petrol retailers that we’re not going to tolerate unfair practices or price gouging is an essential part of that.
“Your readers need a government that isn’t going to be about the most powerful interests, it’s going to be about them. That’s what they expect of us, that’s what they have a right to expect from us, and that’s what we’re going to do.”
The Competition and Markets Authority said in December competition remained “weak” between petrol stations, and profit margins for retailers were “persistently high”. Mr Miliband added: “The CMA has a range of powers to act and we say to them they will have our full backing. There’s a difficult situation going on in the world, but no company should take advantage of that situation to boost their profit margins and rip people off.”
A government source added: “The CMA has the power to fine companies if they mistreat consumers and we expect them to use these powers if appropriate.”
Gas and electricity bills are covered by regulator Ofgem’s price cap which is fixed until June. But if the conflict continues and Iran maintains its stranglehold on shipping in the Strait of Hormuz, then households could face dramatic hikes. Yesterday the US also bombed Kharg Island off the Iranian coast – home to a major oil terminal which 90% of Iran’s crude oil goes through.
Mr Miliband promised to leave no stone unturned to protect households, saying that the government would “keep looking at how we can do more”. He said: “Lots of the companies know that it’s really important to exercise responsibility in this crisis, and that’s the message we’re conveying.
“I think it’s really important that your readers know that in April the price caps are going to fall, and that’s guaranteed until the end of June. We are incredibly determined to help people through this crisis and the intervention we’ve already made will help, but the companies have a responsibility to 100%.
“We’ve got our warm homes plan, that’s really, really important for helping people and we’ll keep scrutinising what can be done because we’re determined to fight for people.”
The ex-Labour leader praised Keir Starmer’s refusal to join the US/Israeli military action, and accused the Tories and Reform UK, who backed joining the conflict, of recklessness. He said: “The number one task of this government is to tackle the cost of living crisis, that is absolutely front of mind for the British people.
“When the Conservatives and Reform took their positions, they did so without regard for what the implications of this conflict could be in many senses. I think it was irresponsible, and I think we’re fortunate to have the Prime Minister’s calm and measured leadership.”
Mr Miliband also said the conflict showed the importance of ending a reliance on fossil fuels, and delivering on GB Energy’s goal of making the UK a clean energy superpower.
He said: “The single most important lesson of this crisis is we’ve got to get off these fossil fuel markets that we don’t control. We don’t control the prices of these fossil fuel markets and so wherever the oil and gas comes from, whether it’s from the North Sea, or from elsewhere, we’re affected.
“Half of the recessions that have been caused since the 1970s have been caused by fossil fuel price spikes. That’s our big vulnerability, and so whether it’s GB Energy or the other action we’re taking, all we’ve announced on nuclear power, it’s all about giving us protection. It’s about the long-term climate crisis, the biggest long term threat to security we face.”
Mr Miliband labelled the Tory energy policy to keep relying fossil fuels as a “national security danger”. Tory leader Kemi Badenoch had claimed his Net Zero ideology left Britain “exposed and vulnerable”.
Mr Miliband said: “Nobody could logically argue that doubling down on fossil fuels when the problem is fossil fuel markets we don’t control is an answer to a fossil fuel crisis. They’ve jumped on an anti-net zero clean energy bandwagon. It was a terrible bandwagon for them to jump on an irresponsible bandwagon. And I think the British people know this.”