Former Shadow Energy Secretary, Caroline Flint has challenged the CMA over Sajid Javid’s influence over the finding of their report.
In a letter to the CMA Flint criticises Javid for his heavy steer when he published a consultation document about the CMA investigation in July 2015.
Flint argues: “I believe that trying to use market mechanisms, instead of Government regulation, to tackle a market failure, stems directly from the revised terms of reference provided by the Secretary of State in July 2015. In his foreword to the consultation document, Sajid Javid clearly states: ‘Competition should be used as a serious alternative to regulation. Well-functioning markets should not need Government intervention. If the market is not working properly then the first test should be whether competition tools could be used to deliver policy objectives.’
“The Secretary of State contradicts himself in the space of two sentences. If this were a well-functioning market it would not require a CMA investigation. If competition tools were sufficient to overcome excess prices, then they would have worked years ago and will be insufficient now to tackle the gross over-charging of the majority of customers. I contend that the CMA has been hamstrung; and given a heavy steer not to use Government regulation to resolve a clear market failure.”
Commenting on her submission to the CMA, Flint said: “Despite the evidence of over-charging by the Big Six, which had risen to £1.7billion a year by 2015, the CMA has ducked the obvious answer – to introduce a protected tariff – a maximum price linked to wholesale prices. This could even be an interim measure until the market begins to work competitively.
“The CMA appears to have been knocked off course - and the reason appears to be Sajid Javid. He re-wrote the rules to effectively warn that he wanted only competition tools to be used – not government regulation.
“And now we have half an answer to the growing problem of over-charging. Javid has failed to put the consumer first. The vested interests will be delighted. But this report is not the end of this issue. The campaign for fair energy prices will continue.”