Policy & regulation

Littlechild’s warnings on Ofgem powers cause concern

A leading parliamentary champion of the energy price cap has urged the government to legislate on the issue following comments by Stephen Littlechild that Ofgem lacks the powers to introduce a bills clampdown.

John Penrose MP, who sponsored a high profile parliamentary debate on energy prices before the election, has written to the energy regulator seeking urgent clarification on whether it has the power to deliver the government’s price cap pledge.  

Earlier this week, former Ofgem chief Littlechild questioned whether the energy watchdog has the power to fix market failings by imposing price regulation on suppliers:

Littlechild said that if a supplier declined to accept a cap, Ofgem would have to seek the powers to impose it from the Competition and Markets Authority, which rejected such a move in a report last year.

Penrose, who claims credit for the energy price cap proposal in the Conservative manifesto, said: “The government needs to deliver on its manifesto pledge to end the energy rip-off for 17 million families.  

“If Ofgem doesn’t have the power to do this, we would have to table legislation in parliament instead. Only then will we put an end to the Big Six stitch up.”  

Business secretary Greg Clark wrote to Ofgem chief executive Dermot Nolan after the Queen’s Speech, asking him how he could use the regulator’s powers to resolve energy market failings and satisfy government concerns about consumer detriment.

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