Tougher new review of energy company standards to be unveiled

Laura Kuenssberg

Former Business Editor

Ed Davey is likely to stop short of requesting a full Competition Commission inquiry Credit: PA Wire

Tomorrow Ed Davey is likely to give more details of the annual 'audit of competition' of the energy market but stop short of requesting a full Competition Commission inquiry into the sector.

It is formally up to Ofgem or the Office for Fair Trading to instigate a full competition inquiry, although of course intense political pressure could very rapidly make it happen.

But tomorrow it is likely that the Secretary of State will just give more details of Ofgem's annual check on the state of the industry, which will involve them and two other regulators - the Office for Fair Trading and the Competitions and Markets Authority.

The details are not yet completely finalised but it will look at profit and pricing, transparency, competition and how well firms are engaging with customers.

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The Energy Secretary will give more details of Ofgem's annual check on the state of the industry tomorrow. Credit: PA Wire

The politics of the energy industry are moving so fast, it is entirely possible that this could all change overnight. But as things stand, don't expect too much from the Energy Secretary tomorrow.

Ofgem committed to doing an annual audit back in September. So this is not a major new move that's come about as a result of recent consumer disbelief over ever rising prices, just more information on how an existing proposal will work.

The debate over energy has come to the forefront of domestic politics over the last month. Credit: PA Wire

It is worth noting that Ofgem did look at similar issues in detail in 2008 and 2010.

They concluded that the big firms were stifling competition by making it hard for consumers to understand what was going on, and poor customer treatment.

But, crucially, they did not find that there was anything structurally wrong with the market, which would be what a competition commission inquiry would consider.

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