May un­veils draft en­ergy price cap plan

Daily Record - - NEWS -

A CAP on “rip-off” en­ergy tar­iffs was an­nounced by the Govern­ment un­der draft leg­is­la­tion pub­lished yes­ter­day.

Watch­dogs Ofgem will bring in a cap on poor value stan­dard vari­able or other de­fault tar­iffs, which will ini­tially come into ef­fect un­til the end of 2020 but would be ex­tend­able un­til the end of 2023.

If made law, the Do­mes­tic Gas and Elec­tric­ity (Tar­iffs Cap) Bill will help more than 18mil­lion cus­tomer ac­counts in Eng­land, Wales and Scot­land and would re­quire Ofgem to con­sult and im­pose the cap “as soon as prac­ti­ca­ble”.

The cap was pro­posed in Prime Min­is­ter Theresa May’s Tory party con­fer­ence speech last week.

The Govern­ment said: “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 of the Big Six en­ergy sup­pli­ers on stan­dard vari­able and de­fault tar­iffs are pay­ing £1.4bil­lion a year more than they need to.

The draft Bill fol­lows Wed­nes­day’s an­nounce­ment by Ofgem that they are to ex­tend the pre­pay­ment price cap to one mil­lion more vul­ner­a­ble house­holds this win­ter, sav­ing them £120 a year, although it won’t take ef­fect un­til Fe­bru­ary.

May said: “I have been clear that our bro­ken en­ergy mar­ket has to change.

“It has to of­fer fairer prices for mil­lions of loyal cus­tomers who have been pay­ing hun­dreds of pounds too much.

“The pub­li­ca­tion of draft leg­is­la­tion is a vi­tal step to­wards fix­ing that and in of­fer­ing cru­cial peace of mind for or­di­nary work­ing fam­i­lies all over the coun­try.”

Busi­ness and En­ergy Sec­re­tary Greg Clark said: “While five mil­lion house­holds will see their bills capped from this win­ter, I want to see ev­ery house­hold pro­tected from rip-off bills.”

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