Denton & Reddish MP, Andrew Gwynne, has raised concerns about the gas market, with allegations of fraud being made.
Currently the Financial Services Authority (FSA) are investigating claims that Britain’s £300bn wholesale gas market has been manipulated by some of the big power companies, exploiting weaknesses similar to the recent Libor scandal.
Andrew Gwynne MP said:
“These current reports of potential fraud are very concerning, which if true suggest shocking behaviour in the energy market that should be dealt with strongly by the Government.”
“For months Labour has said that customers are getting a raw deal and the gas and electricity companies should be forced to sell the energy they generate into a pool, to open up the market and ensure fairer consumer prices. These reports make the need for action all the more urgent.”
Labour has called for transparency and radical reform of the energy market to make it more transparent and competitive. Energy companies in the past have blamed wholesale costs for rising bills but the truth is no one knows the real cost of energy, Labour are calling for secret backroom deals to end, companies should be forced to sell all their power into a pool.
The Labour Party has already set out plans to radically reform the energy market by breaking the dominance of the Big Six, by requiring them to sell power into a pool, allowing new businesses to enter the market, increasing competition and driving down energy bills for families and businesses. Labour would also abolish Ofgem and create a new energy watchdog with tough new powers to force energy companies to pass on price cuts and clamp down on abuses by the energy giants.
Separately, Ofgem has been warned by a company responsible for setting so-called benchmark prices, ICIS Heren, that it had seen evidence of suspect trading on 28 September, a key date as it marks the end of the gas financial year and can have an important influence on future prices. It is claimed that on 28 September, dealers made unrealistic bids, at the time when information was being gathered to set the wholesale gas price, to suit their own trading position.