MPs call on competition watchdog to probe energy giant merger

An influential group of MPs have called on the competition watchdog to investigate the merger of two of the UK’s biggest energy companies, warning it threatens to be a bad deal for households.

The intervention by the business, energy and industrial strategy (BEIS) committee adds to the mounting pressure for an inquiry into SSE and npower combining to create an energy giant that will shrink the “big six” suppliers to five.

The GMB union recently said ministers should step in and block the merger if the competition watchdog fails to act.

Rachel Reeves, chair of the BEIS committee, said: “The energy market isn’t working for consumers. The proposed merger between SSE and npower risks damaging the development of a more competitive energy market, reducing consumer choice, and threatening to be a bad deal for energy consumers.”

The Labour MP has written to to Andrea Coscelli, chief executive of the Competition and Markets Authority, saying it was “concerning” that the merger could undermine the market’s competitiveness.

“The merger would reduce the big six energy companies to five, with almost half of the domestic energy share held between British Gas and the proposed SSE-npower merged business,” wrote Reeves.

The chair urged the watchdog to look in detail at the possible impacts on the market and fully investigate the risk of reduced competition.

Npower and SSE are in discussions with the CMA. The new firm would have more electricity customers than any other supplier and be only around 1m customer accounts behind market leader British Gas, which has been shedding hundreds of thousands of customers in recent months.

The BEIS committee is also tasked with scrutinising the government’s draft legislation for an energy bills price cap, which is expected to take effect at the start of 2019, around the time the npower and SSE hope to wrap up a merger.

The merger could also potentially be investigated by the European commission competition body.

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