En­ergy tar­iffs cap to help mil­lions of con­sumers

Leg­is­la­tion: 2020 dead­line for reg­u­la­tor to tar­get poor-value tar­iffs

The Press and Journal (North-East) - - BUSINESS - BY JOSIE CLARKE

An ab­so­lute cap on “ripoff” en­ergy tar­iffs has been an­nounced by the govern­ment un­der draft leg­is­la­tion pub­lished yes­ter­day.

Ofgem will bring in a cap on poor value stan­dard vari­able or other de­fault tar­iffs, hav­ing ef­fect ini­tially un­til the end of 2020 but ex­tend­able un­til the end of 2023 at the lat­est, un­der the Draft Do­mes­tic Gas and Elec­tric­ity (Tar­iffs Cap) Bill to help more than 18mil­lion cus­tomer ac­counts in Eng­land, Wales and Scot­land.

The bill would re­quire Ofgem to con­sult and im­pose the cap “as soon as prac­ti­ca­ble” af­ter the leg­is­la­tion is passed.

The BEIS Select Com­mit­tee will be asked to scru­ti­nise the draft leg­is­la­tion to help build cross-party con­sen­sus on the work­ings of the cap as pro­posed in the prime min­is­ter’s speech last week.

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 (CMA) 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 the en­ergy reg­u­la­tor that it is to ex­tend its pre­pay­ment price cap to one mil­lion more vul­ner­a­ble house­holds this win­ter, sav­ing them £120 a year, although it ad­mit­ted this would not take ef­fect un­til Fe­bru­ary.

The govern­ment said it wel­comed the ac­tion by Ofgem but be­lieved this could go fur­ther to pro­tect ev­ery­one on de­fault tar­iffs “from the un­fair prac­tices cur­rently seen in the mar­ket af­fect­ing two-thirds of house­holds in Great Bri­tain”.

Prime min­is­ter Theresa 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.

“To­day’s pub­li­ca­tion of draft leg­is­la­tion is a vi­tal step to­wards fix­ing that and in of­fer­ing cru­cial peace of

“Sup­pli­ers must put an end to loyal con­sumers be­ing treated so un­fairly”

mind for or­di­nary work­ing fam­i­lies all over the coun­try.”

Busi­ness and en­ergy sec­re­tary Greg Clark said: “The en­ergy mar­ket is bro­ken.

“It pun­ishes loy­alty – the in­de­pen­dent com­pe­ti­tion author­ity found mil­lions of peo­ple who are cus­tomers of the Big Six sup­pli­ers are over­pay­ing to the tune of £1.4bil­lion a year.

“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.

“That is why we have pub­lished this draft leg­is­la­tion to­day – send­ing a clear mes­sage to sup­pli­ers they must act to put an end to loyal con­sumers be­ing treated so un­fairly.”

LAY­ING THE LAW DOWN: Theresa May has acted to tackle a claimed £1.4bil­lion an­nual over­spend by Big Six cus­tomers

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.