Energy watchdog Ofgem fails to challenge Big Six suppliers' dominance

Caroline Flint has called for robust action to rebalance market in consumers' favour. Photograph: David Gadd/Allstar/Sportsphoto Ltd./Allstar

Ofgem, the energy watchdog, has failed to make inroads into the market dominance of the Big Six suppliers over the last five years – an omission that many believe is responsible for soaring domestic power bills – figures published today show.

The numbers from the Department of Energy and Climate Change (Decc) come alongside an appeal from the consumer champion Which? and the Federation of Small Businesses for a full competition inquiry into what they describe as a "broken" energy market.

A preliminary review by Ofgem and other City regulators into the dominance of firms such as SSE, E.ON and British Gas is expected to be published on Thursday and recommend a deeper probe by the Competition and Markets Authority (CMA). Caroline Flint, the shadow energy and climate change secretary, warned that such a probe would have the confidence of consumers only if it came up with robust action to rebalance the market in their favour.

The Decc numbers, provided to and published by Flint after a written question in parliament earlier this year, show a market that is next to static. SSE, E.ON and RWE npower hold exactly the same market share in gas now as over five years ago, 15%, 13% and 12% respectively. British Gas, by far the largest of the Big Six suppliers, held 44% of the gas market in December 2007 and still held 40% by December 2012, while EDF saw its share rise from 7% to 9%.

The electricity picture is similar, with British Gas increasing its share of the market from 22% to 25% over the five-year period, while E.ON dropped 1% and EDF and Scottish Power held their shares steady at 13% and 12%.

In both gas and electricity markets, the Big Six control 99% of the business, although that figure should have dropped since as the November price rises highlighted the benefits of moving to smaller independent companies.

First Utility, Ovo, Ecotricity and other new suppliers have repeatedly argued their ability to grow their market share is being thwarted by the dominance of the Big Six and the anti-competitive nature of the market.

Flint, who has promised a radical shake-up if Labour return to power in 2015, said consumers needed to be given new confidence that the prices they pay are fair. "Anything that can help shine a light on the workings of the energy market is welcome. But consumers will be rightly disappointed if the government uses this review as an excuse to kick the problem of rip-off energy bills into the long grass. We have hardly been short of reviews of the energy market in recent years – but what has been missing is decisive action to protect consumers.

"Our plans will break up the big energy companies, put an end to their secret deals and make tariffs simpler and fairer. And until these reforms kick in, we will put a stop to unfair price rises by freezing energy bills until 2017, saving the average household £120."

Richard Lloyd, executive director of Which?, and Mike Cherry, national policy chairman at the Federation of Small Businesses, urged Ofgem, the CMA and the Office of Fair Trading to refer the energy market for further assessment, claiming that nine out of 10 consumers would support this.

In joint letters to the three watchdogs to be sent out on Monday, they say: "Top of our concerns is the need to increase competition and make trading transparent. For too long the lack of competition in the energy market has not been addressed. It is now time for radical changes that deliver an effective, competitive market that delivers for everyone, before the scale of this crisis grows."