Watchdog orders probe into ‘Scrooge’ energy firms

A major investigation into the soaring profits made by "Scrooge-like" energy suppliers was launched today.

Energy watchdog Ofgem ordered an inquiry after it found that average annual profit made from each household's gas and electricity bills has jumped a record 40 per cent.

In September the profit margin was equivalent to £65 a year from each customer but by next month this is expected to have jumped to £90.

The launch of the four-month probe comes as Britain faces the coldest start to the winter this century and comes hard on the heels of surprise hikes by British Gas, Scottish & Southern and Scottish Power.

Ofgem said it wanted to find out for sure if suppliers were "playing it straight" with the public.

Ofgem boss Alistair Buchanan said it would look at the "facts behind the numbers" as companies claimed rising prices in the wholesale market left them with no choice but to lift bills.

He told the BBC's Radio 4 programme: "We must make sure that companies don't put some extra silver in their pockets at a time when we are very concerned about our bills and how we are going to pay for our bills."

Consumer groups welcomed the investigation but said it was long overdue because of concerns that the "big six" firms are profiteering.