Energy Secretary Ed Davey tells Channel 4 News most consumers will be better off under government plans to ensure households are put on the cheapest available tariff by energy firms.
Mr Davey is announcing plans to prevent energy companies from offering more than four electricity tariffs and four gas tariffs. He wants firms to automatically put households on the cheapest tariffs.
He promised Channel 4 News that most consumers will benefit from the changes: “I think we need to do the proper consultation but I do think simpler tariffs will mean more competition because people will find it easier to compare tariffs of different companies, find it easier to switch and I think the simpler tariffs and that spur to competition will help the vast majority of consumers.”
The move follows a confusing episode for the government, after David Cameron appeared to surprise colleagues at prime minister’s questions (PMQs) last month by suggesting the government planned to force energy companies to offer consumers the cheapest deal available.
The Department for Energy and Climate Change had been asked about the proposals a few days before, Channel 4 News revealed, but had rejected them outright.
Energy Minister John Hayes, when asked about the prime minister’s announcement in the House of Commons, was forced to back-track, saying the department was looking at a “number of options”.
Following the PMQs announcement, Ofgem, the energy regulator, revealed it was planning to force suppliers to tell customers about the cheapest deals.
The move follows widespread hikes in energy prices from the majority of the UK’s main suppliers. EDF, British Gas, Scottish and Southern Energy, Scottish Power and npower have all announced winter price increases ranging from six per cent to 10.8 per cent.