Examination of Witnesses (Questions 40-41)
ENERGYWATCH AND
FUEL POVERTY
ADVISORY GROUP
25 JANUARY 2005
Q40 Chairman: Do you think there is a
case for the reintroduction of price regulation in the gas market?
Mr Asher: That is not an energywatch
position. The best way is to ensure that we try to eliminate the
effects of this vertical integration to allow new entry, the growth
of forward markets, the growth of traders, so that the market
becomes a mature one and works properly. That is where the best
efforts should be spent. I think, though, as we have said before,
there is a need to intervene on behalf of vulnerable and low-income
consumers in the ways that Peter has mentioned.
Q41 Chairman: Mr Lehmann, should there
be restoration of price regulation?
Mr Lehmann: No, we agree with
Alan on that. We would certainly try to make this market work
better. And it does work very well in some ways. When people put
their prices up, customers switch—a lot of them—and
that is healthy. If I may pick up on something Mr Clapham asked
earlier on, we think there should be very careful monitoring of
the movements in retail prices, wholesale prices and margins all
the way through the chain, so that we all know what is happening.
We have asked DTI and Ofgem if they will do that for us. DTI,
after some cajoling, seemed to be willing to cooperate there.
Ofgem, rather surprisingly—and you may want to pick this
up with them—although we have not finished our dialogue,
are so far resisting and saying it is too difficult and will require
too much work. That is really very puzzling to us. To see what
is happening to retail prices, what is happening to wholesale
prices, is not simple, we cannot do it ourselves, but we think
it is very important that everyone knows what is happening.
Chairman: Thank you very much. That is
very helpful. If you have any additional afterthoughts or if we
want to check up on any points you have made, we will be in touch.
Thank you very much.
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