The proposed merger between two of the UK’s biggest energy companies, npower nd SSE, is being criticised by unions over fears it would reduce competition. The business secretary is being urged by the GMB to block the merger that would exaggerate the current failings in the UK energy market. SSE is currently the UK’s second biggest energy provider and npower is the sixth biggest. If the merger is allowed to take place it will make them the new market leader in electricity and second biggest gas supplier.
The merger is also causing concerns amongst other the GMB and other unions, including Prospect and Unite, over the possibility of job losses. The GMB union has expressed these concerns in a letter to Clark, saying that. “This is an obviously worrying time for SSE and npower employees, who will be concerned that job cuts will inevitably follow a merger,”
According to Tony Keeling, chief operating officer of retail at SSE “The merger will improve competition in the market by turning 60 competitors into 59, of which one offers customers a completely new model that combines the resources of established players with the agility and innovation of an independent supplier – ultimately offering better value for customers.”
The proposals are still awaiting approval from shareholders and the UK and EU competition watchdogs, so it’s still unclear if the deal will go ahead. The GMB have advised Clark to use his powers under the Enterprise Act 2002 to block the merger if it’s approved. Npower’s parent company Innogy have warned that without the merger it would be forced to take further “efficiency measures”
Justin Bowden, the union’s national secretary for energy, said that “The merger between SSE and npower is a test of duty [to keep energy secure, cheap and clean] and until there is a settled energy policy, we risk a private cartel if the merger is given approval.GMB urges the secretary of state to exercise existing powers to prevent yet more needless price hikes that are the penalty for a dysfunctional energy market”
The Department of Business, Energy and Industrial Strategy’s response to the unions concerns, are that it’s committed to reducing bills for customers, and is working on legislation that will cap prices. A spokesperson for the department said that “We are aware of the decision by SSE and Npower to merge their retail customer businesses. The independent competition and markets authority is the watchdog with oversight of mergers,” a spokeswoman said.