Ofgem boss says “sorry” to ripped-off energy customers
MPs have torn into Ofgem boss Dermot Nolan for not acting earlier to stop millions of energy customers being ripped off by being overcharged.
Members of the business, energy and industrial strategy select committee accused the chief executive of the energy regulator of being a “passive bystander” by failing to protect customers.
Mr Nolan will not get his £15,000 bonus this year he told MPs as he admitted Ofgem had not acted fast enough to help households realise they were on the most expensive energy tariffs, otherwise known as standard variable rate tariffs (SVTs).
Official figures show that a record 5.5 million people switched energy supplier in 2017 – up 15% on the previous year.
Even so, as many as 56% of homes, or around 11.5 million consumers, are still paying through the nose on SVTs. Most could save around £300 and more by swithing to a cheaper deal.
Mr Nolan told MPs the fall in people on SVTs had not been as rapid as he had hoped.
Rachel Reeves, the chair of the business, energy and industrial strategy select committee, said: “It’s not about what you hoped for, you’re the regulator for the energy companies. My children hope for lots of things from Father Christmas; they can hope, they don’t have much impact on what Father Christmas delivers in their stockings.
“But yours isn’t about hope; you are the regulator, you are the person who is delivering or supposed to be delivering on this. The whole language you use is like a bystander, rather than an active participant in the market.”
Peter Kyle, the Labour MP for Hove, said: “Your testimony sounds so incredibly passive. Do you ever roll your sleeves up and really get stuck in? I don’t see any evidence of that.”
Nolan said in reply: “I apologise if I seem passive, I honestly do not feel passive … I wish we had moved earlier in putting price caps in.”
He was asked how Ofgem could justify staff being given almost £1m in bonuses this year when so many customers were still paying too much.
Nolan said the bonuses were justified for other staff because much of Ofgem’s work was not in the consumer sector. But he would not be receiving his bonus, Ofgem’s remuneration committee had decided. Nolan received a £15,000 bonus in 2015-16 and 2016-17 on top of his £190,000 salary.
Are you paying too much for your energy bills?
We compare prices from the Big 6 and many other energy suppliers, getting you the very best price.