London, U.K. --- (METERING.COM) --- August 22, 2008 – U. K. energy watchdog energywatch has reacted to recent hikes in both electric and gas tariffs, suggesting that the competitive energy market is not protecting customers.

Campaigns Director Adam Scorer said: “The brakes have failed on the energy market. The results are calamitous. Protection for the poorest, effective competition and rational wholesale markets should be limiting the impact on consumers. Clearly they are doing no such thing.”

Recently British Gas announced increases of up to 35% in energy tariffs, and E.ON will raise gas bills by more than a quarter, with electricity bills increasing by 16%. energywatch says this raises the stakes on Government and regulator Ofgem’s plans for fighting fuel poverty and market reform due to be announced in the autumn.

The average U.K. household gas bill has risen by 31% this year and by 160% since 2003. Electricity bills over the same period have risen by 22% and 96%.
 
“In the long term government needs to drive a super energy efficiency campaign for new and existing properties,” Scorer said. “The energy market has hard-wired fuel poverty into the system; government could reverse that by building energy efficiency into the fabric of all our homes.

“Alistair Darling and John Hutton have both expressed concerns to Ofgem about the relation between profits and prices and the effectiveness of competition in the energy market. Ofgem's market probe is due to report next month. Unless that leads to action to promote more competition, new entrants, increased trading and fairer price formation consumer will fail to feel the benefits of a properly competitive market.

"If the era of cheap energy is over, then the era of cheap solutions to fuel poverty is over as well. Government will fail to meet its fuel poverty target for 2010. Unless it acts quickly there will be questions about whether it has effectively abandoned the fight".