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A Labour government would forcibly reform the big six regardless of what the ongoing Competition and Markets Authority investigation rules on vertical integration.
In an exclusive interview with Utility Week, shadow energy secretary Caroline Flint said the party was determined to press ahead with its plans for major reform of the market regardless of the CMA’s findings, due to be published after the election.
She said the CMA had access to more information than the Labour Party had in opposition, and as such may come up with further reforms than the party had proposed. However, she said “there are certain areas of policy we are absolutely committed to.” This was in reference to Labour’s stated policy of reintroducing an energy pool, and creating a firewall between retail and generation businesses, which would effectively break up the vertical integration of the big six energy companies.
Asked whether Labour would act on vertical integration even if the CMA ruled that it did not distort the market, Flint replied: “I’m still committed to doing something in this area.”
She added: “This is not about companies completely divesting themselves of different parts of their organisation, it’s about giving transparency so people can be reassured there isn’t gaming going on from one part of the business to another.”
Flint’s comments follow the publication of the CMA’s first comments on its ongoing inquiry last month, in which it suggested that vertically integrated firms have no interest in or ability to harm the competitive position of non-integrated firms.
Flint reiterated the Labour Party’s commitment to a 20-month energy price freeze, which she said “will be one of the first acts of the new Labour government,” regardless of the CMA’s findings.
She said the CMA report would be “complementary” to her party’s energy reforms, adding: “I’m sure there is a way we can dovetail these ideas together.”
The full interview with Caroline Flint will be published as part of Utility Week’s Lobby series on March 27th.
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