Ofgem’s chief declared he is “optimistic” about the future for consumers at the House of Commons yesterday. The energy watchdog’s head Alistair Buchanan told MPs on the Energy Select Committee that the industry has experienced a real “wake-up call” in the last couple of months.

The comments come amid government plans for the biggest market shake-up since privatisation in the 1980s. On top of this the regulator is drafting new rules for energy price plans that simplify the tariff structure.

Prompted by committee chairman, MP Tim Yeo, on the complexity of a tariff system that “sometimes obscures easy decision-making for consumers,” the Ofgem boss said that the industry was finally acting to change for the good.

Mr Buchanan said: “Companies, I think, by and large have accepted that they had really reached a very poor position and that they’re now going to move this on. The previous times I’ve been here [to the Commons] I’ve not been optimistic at all but I’m quite optimistic that the industry has had a bit of a wake up call and a shake down on this.”

Andrew Wright, senior partner for markets at Ofgem, also present at the meeting, said that standardisation of tariffs would help consumers. However he warned that “we need genuine innovation rather than innovation on how to bamboozle the consumer.”