Cap rip-off energy bills, PM told

MPs from all parties will call on Theresa May to cap rip-off energy tariffs in a Commons debate next week.

A former Cabinet Office minister has won the right to hold a vote on the scandal which could clear the way for price controls.

Conservative MP John Penrose said: ‘Loyal customers are being systematically ripped off by big energy firms, and it’s not fair.’

Most of the ‘Big six’ energy firms have recently announced inflation-busting price rises. Analysts estimate that these will add £530million a year to bills. The rises were imposed despite regulator Ofgem saying they are not justified by any wholesale cost increases. The PM has signalled that she is set to take action. The problem surrounds so-called standard variable tariffs (SVTS), which more than 60 per cent of households sign up to. They are £200 to £300 a year dearer than the cheapest market deals.

Millions who have never switched supplier are on an SVT. But those on good value fixed-rate tariffs are automatically switched to an expensive SVT when their deal ends.

Mr Penrose said energy firms should have a cap on their SVT to ensure it is no more than 6 per cent dearer than their cheapest advertised tariff. He said: ‘Most industries don’t exploit their best customers like this.’ The debate on Thursday has been sponsored by the Labour MP Caroline Flint and Patricia Gibson of the SNP.

This week, German energy giant E.ON said it will put up price of electricity by 13.8 per cent and gas by 3.8 per cent next month. some 2.5million households will see an 8.8 per cent rise in dual-fuel bills – £90 a year.

similar rises were also announced by German-owned Npower, French-owned EDF and spanish-owned scottish Power. British Gas has frozen prices until autumn. A decision on changes by SSE is also likely.

E.ON said: ‘The dual-fuel price change stems largely from an increase in costs, due mainly to the rise in non-energy parts of the bill such as social and environmental schemes which support renewable energy...’