Ofgem ‘in last-chance saloon’ over energy bills

MINISTERS have warned Ofgem that it will be scrapped if it fails to shake up the market to end the monopoly of the Big Six energy firms.

The regulator has been told it is in the ‘last chance saloon’ and must get more suppliers into the market and find a way to curb the profits of the main suppliers, who have cashed in while consumers have seen bills soar.

It is conducting a joint assessment of competition with the Office of Fair Trading and the Competition and Markets Authority, due to report in March. Senior sources say ministers expect a hard-hitting review that will shatter the dominance of the Big Six and produce concrete plans to slash bills.

A senior Government source said: ‘This inquiry is Ofgem’s last opportunity.’

Energy firms insist their retail profit margins are tiny. But critics, including consumer group Which?, say the companies are merely transferring their excessive profits to their wholesale arms – which account for about 60 per cent of domestic energy bills.

Energy UK, which represents the firms, said the industry will co-operate with any inquiry.

Ofgem said: ‘We are implementing the biggest changes to the retail energy market since competition began. We have also secured over £75million in fines and payments for consumers since April 2010.’