SSE’s betrayal of public trust

Ofgem, the energy regulator, needs to take draconian action against the senior managers who presided over this consumer con. And, if it does not have sufficient powers to hold these individuals to account, the Government should legislate on this issue of accountability.

SSE – formerly Scottish and Southern Electricity – was headed from 2002 by chief executive Ian Marchant who has previously announced that he will retire this summer. Paid just over 
£1m a year, he said that 
“the time is right for a change” and that he would waive a share award which could have yielded £583,000. He has been replaced by his deputy, Alistair Phillips-Davies.

Why should both men – and others if necessary – not be held personally accountable for failings that took place on their watch when the watchdog concluded that managers had not paid enough attention to the issue of compliance in “a woeful catalogue of failures”?

After all, they headed a firm which gave its doorstep sellers in the north of England – individuals probably unaware about the intricacies of the energy market – this script: “What I’m here to do today is show you a government thing called a deregulation which results in your energy prices being lowered by doing nothing at all.” If only there was a scintilla of truth to this.

The inadequacy of Ofgem’s powers to serve as a deterrent is also highlighted by SSE’s latest results. The firm made a profit of £397.5m in the six months to the end of September, an increase of 38.3 per cent on the corresponding period in 2011.

As such, a £10.5m penalty will hardly dent the viability of a company which will have tens of thousands of customers across Yorkshire. And, while Ofgem is at least now alert to such mispractices, the fine offers scant consolation to those families who signed up to SSE under false pretences, and who might still not understand the scale and complexity of this betrayal of public trust.