Bid to end ‘rip-off’ energy bills

MINISTERS plan to end “rip-off” energy bills with a draft Bill to cap prices.

Business Secretary Greg Clark warned that the energy market is “broken” and needs fixing as he gave the Big Six companies four months to end excessive payments for consumers.

The Bill, which was in the Tory election manifesto, will introduce an “absolute cap” on energy prices.

Once the legislation is passed, industry watchdog Ofgem has to consult and impose the cap practicable”.

The Government said it had taken the step because the energy market “does not operate in the interests of the majority of consumers”, adding: “While we are in favour of free markets, we will always take action to fix them when they’re broken.”

The Competition and Markets Authority found that customers on standard “as soon as variable and default tariffs are paying £1.4billion a year more than they need to.

Mr Clark yesterday told MPs: “The energy market is broken. It punishes loyalty.”

He added: “The independent competition authority found millions of people who are customers of the Big Six suppliers are overpaying.

“That is simply wrong. While five million households will see their bills capped from this winter, I want to see every household protected from rip-off bills.” Will Hodson, of The Big Deal, an organisation helping access to cheaper energy, said: “This price cap is hugely welcome.

“Big Six companies have been overcharging their most loyal customers for years.”

But Alex Neill, of consumer group Which?, said: “For millions of consumers worried about their energy bills, a cap might sound like a positive move.

“However, the Government must guard against any unintended consequences that undermine customer service and push up prices.” And Richard Neudegg, of uSwitch.com, said that the Government was “sending out completely the wrong message” by suggesting that a price cap will improve the retail energy market.

He said: “This intervention will remove the most effective weapon in keeping prices down – competition.”

Mr Neudegg added that ministers should be focusing on widening the Warm Home Discount for the vulnerable.