Minister to unveil details of energy market review

Energy Secretary Ed Davey is expected to unveil more details of a proposed review of competition in the energy market in a Commons statement.

Prime Minister David Cameron told MPs on Wednesday that a competition inquiry would be unveiled straight away.

The review will be led by the regulator Ofgem, together with the Office of Fair Trading (OFT) and the Competition and Markets Authority (CMA).

Mr Davey is due to deliver the annual energy statement to the House of Commons and the review is expected to report annually on the state of the energy market, examining the barriers encountered by new suppliers entering the market, scrutinising prices and profitability, and evaluating how easy customers are finding it to switch suppliers.

"I'll be announcing that we'll do an annual competition assessment to make sure that these big six [energy companies], they feel the pressure of competition," Mr Davey has said.

"We're not going to let them get away with hiding things, from people, from Parliament, from ministers," he said.
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The first review is expected to be complete by spring 2014 and would help to bring "much more transparency" to the sector, he added.

Four of the UK's six main energy companies have recently announced price rises, with an average increase of 9.1%, and the other two are expected to follow suit soon.

The firms say the rises are largely due to increasing wholesale prices, but Ofgem says these have only risen by 1.7% in the last year.

Wholesale costs - the price at which energy companies buy the gas and electricity they provide to customers - make up just under half of the energy bills paid by most customers.

Appearing before the Energy and Climate Change Committee of MPs this week, some of the big energy companies blamed the government's social and green policies for driving up prices.