Millions of households will be given the cheapest price for their gas and electricity “as quickly as possible”, the Energy Secretary is to announce today.
Under new proposals published by the Government, energy suppliers must offer their cheapest available tariff to their customers at the latest by summer 2014. They will also be limited to four “core tariffs” per fuel type and consumers will be moved off poor value “dead-tariffs”. The proposals require the core tariffs to include one standard variable rate tariff and one fixed term, fixed price tariff to help make it clearer, simpler and easily comparable.
Suppliers are also required to offer just a single price for each of the four tariff types and make sure no customers are left behind on poor value and out of date or tariffs. The new move comes in a bid to make it easier for consumers to shop around for the best market-wide deal after a string of price hikes announced by suppliers in recent months.
The news also follows speculation about whether Energy Secretary Ed Davey would stick to the Prime Minister’s pledge last month to get consumers the lowest tariffs, which came as a surprise to DECC and the industry.
Mr Davey said: “I am determined to ensure all consumers get a better deal on their energy bill and get the cheapest tariff they can. Bill payers will no longer face the impossible choice between hundreds of tariffs; each customer will have a maximum of four tariffs for gas or electricity per supplier to consider. And households will have personalised information from their supplier on their bills about the cheapest tariff the supplier offers for their payment method and the cheapest tariff overall.
“For too long people have been stuck on the wrong type of energy tariff, paying more than they need to. Our new proposals will make things much clearer and easier to understand, so that bill payers can get the best deal and feel the benefit in their pockets.”
The document published today also includes measures for suppliers to give clearer information to help consumers switch and proposals to form a network of community groups to help vulnerable homes get better energy deals.