The UK’s second largest city plans to set up its own energy supply business.

Birmingham City Council plans to take on the UK’s major energy providers by offering gas and electricity to its 440,000 residents and 50,000 businesses.

Most of the power in the UK is provided by six companies: British Gas, Scottish Power, Scottish & Southern Energy, Npower, EDF and EON. In the past year both consumer groups and politicians have voiced a desire to see this so-called cartel broken, and last week the government’s energy secretary Chris Huhne he would encourage smaller companies to enter the market.

The city council’s deputy leader Paul Tilsley said: “The citizens and businesses of Birmingham all buy their energy off retailers, not manufacturers of energy. With that kind of market there is an opportunity for Birmingham City Council, which is a major wholesale purchaser of energy, to sell some on. We can buy it in bulk.”

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