February 26, 2018
The plans for a price cap on energy bills was introduced to Parliament today. The Government has claimed that this will save 11 million households up to £100 a year.
The regulator, Ofgem, will be allowed to limit standard variable tariffs until 2020 under the Domestic Gas and Electricity Bill. Following that, the cap may be extended on an annual basis until 2023.
The government said the Domestic Gas and Electricity Bill should be implemented by Ofgem "as soon as possible so that customers get the protection they need by the end of this year".
Rachel Reeves, who chairs the Business Committee in the Commons, said:
"Energy consumers have been overcharged for too long and the government now needs to quickly ensure this legislation is passed in time to protect customers next winter."
The energy industry has been reacting to the news today. Energy UK, the trade association for the UK's energy industry, has said that the energy price cap must reflect energy suppliers' costs, most of which they believe it out with the suppliers control.
Lawrence Slade, Chief Executive of Energy UK, said:
"With a record one-in-six customers switching last year and over 60 suppliers to choose from, the energy market is changing rapidly and has never offered so much choice. It's vital the cap doesn't halt the growth of competition which is helping customers to find a better deal and save on their energy bills."
Greg Jackson - CEO of Octopus Energy - one of the lead challengers who fought for the price cap said:
"As the energy company that has led the campaign for an energy price cap, we are delighted the government is bringing forward this vital legislation.
The power imbalance between customers and companies has stifled competition and led to rip off prices and cynical loyalty penalties which we hope the government will also address with this legislation."
About a third of UK households are charged a variable price for their energy at a default rate set by their energy company, because they have not chosen to shop around for a cheaper fixed-price deal.
If you are on a standard variable tariff then are probably paying too much for your energy and could save money by switching your energy supplier. Energylinx offer an impartial energy comparison and switching service. You can compare energy tariffs and see what you could save online or by calling one of our advisors on 01259 220000.
Posted on February 26, 2018 at 12:25 PM