Ed Davey: Competition in the energy markets is working

The big six energy suppliers have been under considerable pressure to cut bills in response to the fall in the price of oil.

An election looms and politicians from every party have decided the savings companies enjoy have not been passed on.

E.On's decision to cut its gas tariff by 3.5% got an under-whelming response today, even from the regulator who points to the "growing gap between falling wholesale prices and retail prices."

OFGEM reminds us that in a competitive market E.On's price cut should trigger others. All quiet so far but then there are doubts as to whether the energy market in Britain is competitive.

It's an issue the Competition and Markets Authority is busy investigating. Intriguingly the Energy Secretary, Ed Davey, appears to have come to his own conclusions.

Today he told ITV News that he will not support Labour's proposal to give OFGEM new powers to impose price cuts on suppliers because "competition is already doing that".

In his view energy companies who are not pricing to match or beat their rivals are "losing customers as a result."

There's little doubt competition between supermarkets is pretty ferocious - Dalton Philip's sacking as chief executive of Morrisons this morning is proof of that. Mr Davey's suggestion that competition between energy companies is similarly intense will raise a few eyebrows.