UK to Strip Energy Bosses' Bonuses in Mis-Selling Crackdown

By Amara Osei

UK businesses are expected to save more than £100m a year once energy brokers and price comparison services come under Ofgem's remit, under a crackdown on mis-selling set out in the energy independence bill on Wednesday. The bill gives the regulator new powers to order compensation, impose fines and ban rogue operators that pushed households and businesses into overpriced contracts.

It also targets executive pay. The watchdog will be able to crack down on payments to bosses who have "rewarded themselves while customers suffer". The move follows public outrage over large bonus payouts to executives despite investigations into the treatment of vulnerable customers.

What does the bill change for brokers?

Companies with a business energy supply contract often use a broker to secure their deal. Unlike intermediaries who market mortgages or insurance deals, these energy middlemen have been largely unregulated. The government said rogue brokers had been able to push small businesses into overpriced contracts while pocketing hidden commissions, leaving companies paying more than they should.

Energy Secretary Miatta Fahnbulleh said: "People work hard for their money. They shouldn't be ripped off by energy companies or forced to fight for fair treatment when things go wrong." She added: "When energy bosses fail their customers, they shouldn't be walking away with bumper bonuses while families and businesses pick up the bill."

Where does the bill fit in the government's energy agenda?

The bill was announced in the king's speech and is expected to set out more detail on the government's plans to transition to clean energy. It arrives as ministers face criticism over the green agenda.

John Healey recently unveiled more than £3bn of cuts to the energy department's budget, much of which will pay for higher defence spending. The chancellor also said he would veto new offshore wind projects if they did not lower bills, adding to concerns that the government was moving away from its pro-renewables agenda. The government says it remains committed to its target of clean power by 2030.

What happens to landlords and fracking?

Local authorities will get stronger powers to tackle landlords who fail to meet energy efficiency standards, including fines of up to £30,000. Since 2020, it has been illegal to let properties with energy performance certificate ratings below E, unless the landlord can show the property is exempt.

The bill also introduces a moratorium on fracking by ending new onshore licensing in England. Fracking involves pumping liquid underground at high pressure to crack rock and release trapped oil or gas. The practice is controversial because of its links to earthquakes and fears it could contaminate the water table.

The Conservative government banned fracking in 2019. Liz Truss overturned the ban in 2022 during her brief tenure as prime minister, prompting widespread anger.

Climate Transition Minister Katie White said the government was "putting communities first and protecting them from the risks of earthquakes and unsafe drilling".

Are there loopholes?

The moratorium will not include lower-volume fracking operations or "proppant squeeze", which the fracking industry says is not a form of fracking. Tony Bosworth, an energy campaigner at Friends of the Earth, called the exemption an attempt to "creep in through the back door under a different name".

The government said the low-volume activities were outside the scope of the ban and it was not aware of evidence that they posed the same risks as high-volume fracking. Prof Stuart Haszeldine of the University of Edinburgh has said earthquakes caused by lower-volume fracking can be as large and unpredictable as those caused by high-volume fracking.

With the £100m savings estimate riding on broker regulation and the fracking exemption already drawing fire from campaigners, the bill's passage will test how far ministers can balance consumer protection with their wider energy commitments.