MPs criticise fuel watchdog axing

Peter Luff says the move leaves those in dispute with energy firms at risk

A move to scrap the consumer watchdog Energywatch has been criticised by MPs as a "spectacularly bad idea".

Energywatch, an independent body that monitors the gas and electricity industries, is being absorbed into new multi-purpose agency Consumer Focus.

Ministers say the old body lacks powers, and is inefficient.

But MPs on the Commons Business and Enterprise Committee said consumer protection was being risked at a time of steeply rising energy prices.

The new agency is made up of the National Consumer Council, Energywatch and Postwatch.

Attack on profiteering

With annual funding of £15m, the new body also builds on the existing telephone and online advice service Consumer Direct.

It will begin operating at the end of the month.

Consumer Focus Chief Executive Ed Mayo has promised to attack profiteering and take action against "closed and protectionist" energy markets which "end up picking the pockets of consumers".

He said the investigative powers to demand information from companies gave Consumer Focus "teeth".

I fear that it's going to be a rather limited service and most of us will be left to fend for ourselves Energywatch chief executive Alan Asher

But Tory MP Peter Luff, who chairs the business committee, said: "This was never a good idea, but to abolish Energywatch at a time of rapidly rising energy prices is a spectacularly bad idea.

"Almost every consumer who has a problem with an energy company is at risk as a result."

Labour committee member Michael Clapham said: "We require somebody in that market who is robust and is going to take aggressive action to make sure the interests of consumers are looked after.

"By removing Energywatch, we are not going to have that."

'Some support'

Energywatch chief executive Allan Asher said the body had helped five million customers recoup £35m since being set up in November 2000.

Mr Asher said the aim of Consumer Focus was to force firms to improve their complaints handling procedures. However, he confirmed that the body would not take up complaints from individuals.

"There will be some support for consumers under threat of disconnection, and some other vulnerable customers, but I fear that it's going to be a rather limited service and most of us will be left to fend for ourselves," he added.

However, Consumer Affairs Minister Gareth Thomas said: "What we are bringing in is not only a body which will continue to represent consumers, we are also forcing companies to handle complaints better.

"People shouldn't have to go to a complaints handling body."

'A bad time'

Kate Green, from the Child Poverty Action Group, is worried the new body will be too focused on setting itself up while families struggle to pay bills without the help they need.

She said: "It's a bad time to be making these sort of organisational changes.

"It would be bad in any winter... and of course particularly this year when we've seen fuel prices rise so much."

The changes, part of the Consumers, Estate Agents and Redress Act which was approved last year, also include the creation of an ombudsman scheme.

This new ombudsman will rule on complaints about energy and postal services that have not been resolved by the companies involved within eight weeks.