Proposals to make switching firms easy

CONSUMERS will be able to switch energy supplier within 24 hours by 2018, under changes being introduced by the Government after a report found power companies were overcharging customers by £1.2 billion a year.

In a letter to the Competition and Markets Authority, Energy Secretary Amber Rudd said she was concerned that the retail market for gas and electricity is “not working well for consumers” and said the key to getting bills down was encouraging families to shop around.

But Labour accused the Government of failing to take “strong action” to protect households from being ripped off.

In a report last month, the CMA made provisional findings that the main energy suppliers – British Gas, SSE, EDF Energy, RWE npower, E.ON and Scottish Power – were overcharging customers by around 5 per cent, or £40 a household.

It said competition in wholesale markets was working well, but there was “widespread consumer disengagement” from the process of switching supplier.

The CMA said it was considering setting a maximum price limit for standard variable rate tariffs, which could see prices cut or frozen for around 70 per cent of customers with the Big Six.

Energy Minister Lord Bourne said the Government was taking action to put power into bill-payers’ hands.

He said the Government was ready to look into the CMA’s proposal for a “safeguarding tariff” to protect those unable to switch. In her letter, Ms Rudd described such a move as “a potentially significant intervention to protect consumers until other remedies lead to the market operating more effectively”.

Lord Bourne said: “Our number one priority is to keep bills down for hard-working families and businesses across the UK.”