Eon UK chief executive Tony Cocker told the Energy and Climate Change Select Committee (ECCC) on Tuesday that environmental and social levies placed on consumer bills are “regressive” and “would be better funded through general taxation”.
He said the prime minister and energy secretary could “at a stroke” reduce energy bills by £60 per year by removing the levies.
SSE managing director William Morris agreed changes are needed to the Energy Company Obligation (Eco). He told MPs the levies should be removed from bills or that Eco should be extended to “take the pain away from consumers”.
Morris added that Eco costs could increase to more than £100 as the costs ramp up ahead of the March 2015 deadline.
When questioned on the competitiveness of the energy market, Cocker and Morris said the sector is competitive, with the Eon UK boss calling for a Competition Commission review into the sector to help prove that this is the case.
Guy Johnson, the external affairs director at Npower, agreed the UK energy market is competitive, claiming that UK gas and electricity prices are the second and fourth cheapest in the EU respectively.
However, Stephen Fitzpatrick, founder and managing director at Ovo Energy, said that competition in the UK sector is not working, which is proven by the large regional market share by each of the suppliers.
He accused the big six suppliers of “loading” the cost of the social obligations onto the standard tariffs, while active switchers are either “won-back” or enticed with loss-leading tariffs.