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    E.ON-Npower Merger Hits UK Jobs


The new company has to save money in a harsher environment.

by: William Powell

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E.ON-Npower Merger Hits UK Jobs

The merger of two of the UK's 'Big Six' utilities, the German E.ON and Innogy's UK supply arm Npower, could lead to 4,500 call-centre redundancies as the new owner, E.ON, seeks to cut costs. Their standard default tariff, which enabled the offering of low-cost energy to win new customers, has been capped.

The trade union Unite, which has about 1,000 members at Npower, mainly working in meter installation, described the scale of the proposed cuts November 29 as 'horrific'. Referring to the Labour Party manifesto commitment for the December 12 General Election, it said that public ownership would ensure that "energy provision and supply are run in the best interest of consumers and not primarily for profit hungry shareholders." The cuts are expected next year.

"Unite will be involved in all the consultations and our aim is to fully support our members. We will look to prevent as many job losses as we can," it said. Npower, which employ 5,700 people, has seen its market share decrease with business moving to smaller suppliers as customers look for the best value fuel deals. Unite said it "welcomed the opportunity for constructive talks with the management and will campaign strongly to explore all options to save as many jobs as possible." 

In September, E.ON said it was seeking to make 500 voluntary redundancies following the sale of its distribution arm, Central Networks, in March and the subsequent concentration on the customer-facing business.

It said it had to "undertake a deep and rigorous review of how much money we spend in order to ensure we keep costs as low as possible for our customers, become a more agile organisation and build a sustainable business in the UK."

The European Commission approved E.ON's acquisition of most of Innogy's retail businesses in Europe in September.

Price cap challenge succeeds

Centrica, the largest of the Big Five – or four, perhaps, following the transfer of SSE's customers to Ovo – in terms of domestic customers, successfully challenged the regulator's treatment of wholesale costs that energy suppliers incur to serve their customers

In a statement earlier this month it said the outcome of the judicial review "underlines the importance of transparent and rigorous regulatory processes to ensure well-designed regulation that is in the interest of a well- functioning energy market, which in turn allows participants to operate with confidence and ultimately benefits all energy consumers.

"We look forward to continuing to work closely with the government and the regulator on the development of future policy and we remain committed to delivering for our customers’ changing needs, including through our involvement in the transition to a lower carbon future."