Topical question asked in the House of Commons, by Nicholas Winterton (Conservative). It was answered on Thursday, 5 March 2009 on behalf of the Department of Energy and Climate Change.

Topical Questions

Question: Earlier this year, wholesale energy prices dropped dramatically, yet the British consumer continued to pay record high prices for energy. Her Majesty's Opposition believe that the Competition Commission should conduct an urgent investigation into the relationship between wholesale and retail prices. Do the Government agree, and will they ensure that such a review is undertaken?

Answer: It is good to reply to another Member who has a family connection in the House. On energy prices, I do not think that at this stage a referral to the Competition Commission is the right way to go, because it would not be brief and quick. It would take a long time. That is the experience of referrals to the Competition Commission. I believe that the better way to go is what we are doing, which is pressing the energy companies to reduce their prices and pass on the price cuts, and introducing more transparency through the work of Ofgem, which published its first quarterly report on the connection between wholesale and retail prices earlier this month. The hon. Gentleman's general point that we need price cuts to be passed on to consumers is completely right. That needs a combination of tough regulation, consumers associations making their voice clear and the Government doing the same. That is what we intend to do.

Secondary information