The Regulation of Utility Companies in the UK
In the UK the national energy market is something of a hot topic at the moment. Every year profits go up (often by astounding degrees), while tariffs continue to soar. Last week experts and politicians, members of the public and head honchos from the utility companies themselves took to the debating floor en masse to fight it out, spurred on by the tantalizing revelations of an official report into the pricing of basic utilities in the country, published jointly by the Office of Fair Trading and Ofgem (the governmentâ€™s regulatory body charged with keeping an eye on what flows through the pipes, plumbing and wires of the nation).
The report included some seriously stunning figures that indicated profits of the so called â€˜big 6â€™ energy companies of the UK (those utility companies responsible for providing around 96% of the countryâ€™s electricity, gas and water provision) had increased by no less than a factor of four in as many years, from just over Â£230 million in 2009, to more than Â£1 billion in 2013.
Spurred on by the reports of soaring profits, polemicists began launching public harangues at the energy suppliers, creating buzz phrases like â€˜the big cartelâ€™ to imply fixing and cronyism in the highest ranks off the companies. Other experts drew on the reportâ€™s indication that barriers had been built against competitiveness in recent years that had led to the ballooning of rates and, concomitantly, end of year profits.
Political leaders Ed Miliband and current Prime Minister David Cameron both moved to join the fray, with the head of the opposition pledging an industry-wide price freeze if his party won the next general election in 2015. Soon after some of the major firms were said to be considering voluntarily making the move to shake off some of the heat, while industry-leader SSE was the first to implement a price freeze, effective until the start of 2016.
Increasing tariff charges have been a domestic reality for home owners and tenants in the UK for some time, with exponential raises across the board even since the economic turndown of 2008. Today, energy prices are currently at an all-time high, with many claiming the bloated utility charges are far beyond whatâ€™s affordable for the average family surviving on the living wage.
However, the larger companies claim they too have suffered at the hands of uncontrollable price hikes, this time in the region of wholesale and transportation, while there are also fears that the increased demand for more energy-related building projects in the country will not be met as companies are forced to cut turnover in favour of lower tariffs for the public.
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