'Free Market' in the UK non-existant

NaRvIcK DeViL · 07-31-2008, 10:10 AM

The Foreign owned Energy companies have proved without doubt that the so called free market concerning energy is non existent here in the Uk where they continue to increase prices to the uk consumer even though profits would still increase year in year out, even if the current price increases did not take place.

A report shows that the six dominate energy companies have conspired to keep charges artificially high and gives a warning of widespread hardship continuing to happen unless action is taken to stop this blatant profiteering.

It accuses the industry regulator of failing to protect the interests of the British people by allowing the energy companies to get away with their current scandalous behaviour and calls for an immediate overhaul of the way gas is traded and controlled.

This damning report by MPs, urges ministers to take direct action to alleviate the plight of British consumers before the effects of their actions force the UK economy to spiral out of control into a deep recession.

This report comes days after the French company EDF announced price increases of up to 22 per cent for its five million customers. Other energy companies will now take their lead by increasing their prices.

Peter Luff, who chairs the committee on Commons Business and Enterprise, said: “Just because we have found no written evidence of collusion does not mean that the‘Big Six’ energy companies have not conspired to rig the market in their favour - far from it.

“It is clear that there are very real problems in the energy markets at all levels, that goes way beyond these six companies, which needs to be addressed immediately.”

British Gas, npower, Scottish Power, E.ON and SSE, as well as EDF, - are currently operating in a cosy world of minimal price competition. This created an environment where it was “easy for these players to make informed judgments about the behaviour of their competitors. This alone can distort competition” .

Business in the uk are now at a serious disadvantage to its international competitors. “Industrial consumers now face prices above way above normal European levels,” it said. “If these price rises are sustained, they will put British jobs across the board at risk.”

Specific concerns included Britain’s acute shortage of gas storage - only 13 days’ worth compared with 99 days in Germany and 122 days in France.

Mr Luff said this represented a “pathetically inadequate level of gas storage” that left Britain’s energy market technically held to ransom.

The report also said that the Government had failed to respond to the “increasing and entirely predictable gas import dependency”. More storage capacity was an issue of “national importance and should be a high priority in domestic energy policy”.

It also noted that continuing consolidation in the industry will further choke off competition and, in particular, gave warning that the imminent £11 billion takeover of British Energy by EDF threatened to create an overly dominant player, which would add to the upward pressure on pricing.

“you just can’t sacrifice further competition like that without the creation of robust safeguards,” Mr Luff has also called for both Ofgem and the Competition Commission to look “very carefully indeed” at the proposed deal.

The report cited the lack of price transparency and liquidity in the forward market for gas as a key area of concern. “We recommend that Ofgem investigates urgently why gas producers seem unwilling to trade in the forward market,” it said.

In France, EDF and others cannot increase prices by more than 4.5% per year , BY LAW so they offset their price rises in the UK instead. Also all continental countries import Gas from North Sea in the summer at cheap prices and then sell it back to the UK for winter at far higher prices this is just crazy.