Govt: Customers 'not cash cows'

The big six energy firms were accused by Energy Secretary Ed Davey today of appearing to put the needs of their shareholders above those of their customers.

The Industry hit back, saying the 'blame game' was not helpful and the companies and the Government need to work together to keep bills down.

As our Business Editor Laura Kuenssberg reports, the public slanging match over price rises is affecting the building of much needed power stations.

Today EDF became the fifth big company to announce a New Year price rise, although at 3.9% it is smaller than those of its rivals.

It denied the Energy Secretary's claims that it and others were using customers as 'cash cows', and warned against 'tit-for-tat' action.

That was echoed by SSE and Npower, which also refuted claims they are failing customers by not keeping wholesale costs down.

Two of the big six energy companies have hit back over a suggestion they are making profits at the expense of 'cash cow' customers.

SSE and Npower, which between them have more than 16m users in the UK, have denied they are failing customers by not keeping wholesale costs down.

The energy industry has stressed its commitment to "helping those who are struggling" with the cost of bills as it defended itself against criticism over the recent wave of price increases.

Energy Secretary Ed Davey has criticised the industry during his speech to the conference, arguing that customers should not be seen as "cash cows" to be "squeezed" in the pursuit of profits.

The event was overshadowed by the announcement from EDF Energy that its prices would rise by 3.9 per cent from January, making it the fifth of the "big six" energy firms to raise prices.

Energy UK's chief executive Angela Knight told the organisation's conference that the industry had a problem of trust with consumers as a result of increases in bills but insisted "profitability was a good thing".

"We have got a problem - an image problem, a reputational problem, a trust problem. Trust is hard to gain and it's easy to lose.

"Energy bills have risen for well-known reasons, reasons that the industry has made quite clear."

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Caroline Flint MP, Labour's Shadow Energy Secretary, speaking ahead of Ed Davey saying trust between those who supply energy and those who use it is breaking down, said:

Read: Davey not planning on winning any friends at Energy UK

Energy UK has attacked the "tit-for-tat Punch and Judy show of insults" in response to Energy Secretary Ed Davey's comments that customers "are not just cash cows".

Energy UK, which represents the suppliers, said: "The energy industry is vital to the UK. It is a major employer, a serious investor and a significant taxpayer.

"As analysis from UBS shows, about 95% of rising energy costs are out of the hands of the energy companies and can be attributed to Government policies and other network, social and environmental costs."

Energy Secretary Ed Davey is expected to say the industry is facing a "'Fred the Shred' moment" as consumers "see a reflection of the greed that consumed the banks".

Mr Davey will tell Energy UK's annual conference:

Energy customers should not be seen as "cash cows", to be "squeezed" in the pursuit of a higher return for shareholders, Ed Davey will say tomorrow.

The Energy Secretary is expected to tell Energy UK's annual conference that trust between firms and customers was breaking down, amid continued controversy over soaring bills.

Power companies have to make profits so they could invest in energy infrastructure, secure supplies and develop more energy efficient technologies, as well as create jobs, he will tell the London conference.

"But those profits cannot come at the expense of the elderly, the vulnerable, and the poorest in our society," Mr Davey is expected to say.

"Customers are not just cash cows to be squeezed in the pursuit of a higher return for shareholders".