Source · Select Committees · Business and Trade Committee
Recommendation 56
56
Acknowledged
Paragraph: 218
A systemic failure in regulation left the energy supply market, and ultimately taxpayers, more exposed...
Conclusion
A systemic failure in regulation left the energy supply market, and ultimately taxpayers, more exposed when the global wholesale energy crisis began. Some energy supplier businesses were allowed to behave in an entirely unacceptable way, without any consequence for their actions. The Government prioritised competition over effective market supervision, failing to recognise the fundamental importance of energy supply and maintain sight over Ofgem’s actions. Ofgem’s failure to regulate and supervise the energy retail market over the last decade significantly contributed to the collapse of 29 energy suppliers since July 2021. Ofgem did not enforce the rules that were in place and did not understand the business models of the suppliers it is mandated to supervise.
Government Response Summary
BEIS maintains a regular dialogue with Ofgem to review lessons learned and understand where policies can be enhanced to improve outcomes, and will work with Ofgem and relevant bodies to understand if there are any gaps within the current regime which prevent unfit conduct by energy company directors being appropriately addressed.
Paragraph Reference:
218
Government Response
Acknowledged
HM Government
Acknowledged
BEIS maintains a regular dialogue with Ofgem to review lessons learned and understand where policies can be enhanced to improve outcomes. It is crucial that any energy company directors who have engaged in unfit conduct are held to account by the relevant authorities. We will continue to work with Ofgem and relevant bodies to understand if there are any gaps within the current regime which prevent unfit conduct by energy company directors being appropriately addressed. The UK benefits from a strong enforcement regime, where corporate misconduct is tackled robustly. The Insolvency Service has broad enforcement powers to tackle director misconduct, which can lead to disqualification action or criminal prosecution. These powers extend across all UK business sectors. Any disqualification will prevent the individual from acting as a director or being otherwise involved in the management of a company across the whole economy, not just the sector where the failed company operated. These powers do not only relate to insolvent companies; disqualifications can be obtained in respect of directors of live companies where investigations indicate misconduct. As at 31/3/22, there were over 6,500 individuals with active disqualifications against their name.