Politics: Byers: public slow to exploit cheaper energy

AN INVESTIGATION into why consumers are failing to take advantage of competition in the energy market was announced by Stephen Byers yesterday. The Trade and Industry Secretary told MPs that "far too few" domestic consumers were benefiting from the "new freedoms" available.

"Very few domestic consumers in gas and electricity are switching suppliers, even though financially it would be advantageous for them to do so," Mr Byers said. "I want consumers to think seriously about how they can take the benefits which are available from greater competition in the energy market."

Savings of up to pounds 65 a year are available to those who switch suppliers, but more than 80 per cent of consumers have remained with their original gas or electricity providers.

The inquiry will focus on whether the process of changing is too complicated and on how consumers can obtain easy-to-understand price comparisons. It will also examine whether potential switchers are discouraged by reports of mis-selling.

In the resumed debate on the Queen's Speech, Mr Byers stressed the Government's determination to open up markets. He criticised France for failing to open up its electricity market to competition after legal action by the European Commission was announced earlier this week. "The failure of France to give effect to the electricity directive is disappointing, to say the least."

France's state-owned electricity provider, Electricite de France (EdF) has a monopoly at home because the country has failed to carry out liberalisation called for by a European Union directive. Mr Byers said EdF was "taking advantage of open European markets to establish a powerful position in Europe, but retains a monopoly position in its home market. This is clearly unacceptable."

However, Angela Browning, the Conservative trade and industry spokeswoman, attacked proposals in the Queen's Speech. She told Mr Byers: "You simply haven't got a clue" about business and cutting red tape. "Such is the success at building an enterprise culture of this Government [that] in just over two years this country has slipped from fourth to eighth position in the world competitiveness league.

"They have imposed pounds 30bn of stealth taxes on business, including higher fuel duties, stamp duties, changes to the administration of corporation tax, abolition of tax credits on pension funds and of course - despite all the words we've heard... about information technology and the importance of e-commerce - a half-a-billion extra tax for people who work in personal services companies"; the so-called IR35 tax.

Mrs Browning said the Government used the language of business but it was "not instinctive" - it was "quite bogus, in fact, when one looks at their track record".