People found guilty of rigging wholesale gas and electricity prices could face up to two years in prison under plans unveiled by the Government.
Under the new laws it would be a criminal offence to fix energy prices at an artificial level or use insider information to buy or sell energy on the wholesale market, the Department of Energy (Decc) said.
It would also become an offence to make misleading claims or conceal facts about wholesale energy prices in order to manipulate the market – especially if such an act could affect competition in the marketplace, Decc said.
The move, which would give energy regulators new powers to prosecute people suspected of rigging the energy market, aims to safeguard consumers and provide a deterrent against abuses.
Currently regulators can investigate and fine people found breaching the rules on energy prices, but under the plans to make breaking the most important rules a criminal offence, those found guilty could also face a jail term and a criminal record.
Energy Secretary Ed Davey said: “Manipulating the energy market is absolutely unacceptable, and these proposals provide a much stronger deterrent – more in line with the approach taken in the financial markets.
“The Government is doing everything it can to help consumers by increasing market competition to drive prices down. We have also set up the first ever annual competition assessment, which has led to the first ever referral of the sector to the competition authorities.”
Rachel Fletcher, senior partner, markets, at regulator Ofgem, said: “Ofgem has a track record for taking strong action against companies that break the rules.
“And we want the strongest possible deterrents in place to guard against market manipulation and insider trading. We put forward the case to government for greater powers to take action if needed, and we welcome this consultation.”
The proposals have been put out to consultation and could come into force across the UK in spring next year.
The move is the latest in a series of measures to shake-up the energy market, in the face of rising consumer bills and widespread mistrust of the “Big Six” electricity and gas suppliers
A full investigation by the Competition and Markets Authority has been launched to investigate competition and transparency in the retail energy market.
Richard Lloyd, Which? executive director, said: “Anyone found to be manipulating wholesale energy markets deserves to have the book thrown at them.
“Rumours of market abuse do nothing for consumer confidence in the energy market so we support the Government tightening the rules and bringing in stiffer penalties to deter wrongdoing.”