Energy firms to be forced by law to give best deals

Thursday 18 October 2012

BRITAIN'S energy firms are to be forced by law to give all their customers the cheapest energy deal available, David Cameron has announced in a bid to end the confusing array of tariffs and cut householders' rising cost of living.

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MICHAEL SETTLE and JODY HARRISON

However, the planned Energy Bill, due in the autumn, will not be implemented in time to cut bills this winter.

The pledge came as the squeeze on household budgets continued, with ScottishPower announcing increases for its domestic gas and electricity prices from December by an average of 7%.

The change will mean a £2 per week rise in bills for 2.3 million households, although 700,000 customers will see no change because they are on fixed tariffs. Last week, Npower and British Gas announced they were increasing gas and electricity prices, blaming the UK Government's policies as well as wholesale prices.Earlier at Westminster, the Prime Minister unexpectedly signalled his plan to introduce a new law to tackle the plethora of tariffs and keep consumers' energy costs as low as possible.He told MPs: "I can announce that we will be legislating so that energy companies have to give the lowest tariff to their customers – something Labour didn't do in 13 years." Earlier this year, the Coalition encouraged consumers to switch providers to cut their bills, and announced moves to require energy companies to inform their customers of the cheapest tariffs available.However, Downing Street acknowledged that neither had worked and the market was simply not working for most of Britain's households. A spokesman said it was still the case that only a minority of people switched their energy provider. He said: "Lots of people are not benefiting from that market, especially vulnerable people, who are less likely to switch tariffs."We want to see more people on the lowest deals but we are not seeing that. It's very complicated. "We need to push some of this responsibility on to the energy companies."An industry source complained the power companies were "confused" by Mr Cameron's announcement and suggested so too was the Department for Energy in Whitehall. The source said: "We've gone to them for clarification about what Mr Cameron means but they say they know nothing about it." The energy pledge came as the so-called Quad – Mr Cameron, his deputy Nick Clegg, Chancellor George Osborne and his deputy Danny Alexander – was due to meet to discuss the UK Government's energy policy.

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Energy firms to be forced by law to give best deals

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