UK Government launches bill to cap energy prices

New legislation to cap energy prices and help consumers save money is being introduced to Parliament today. The Domestic Gas and Electricity (Tariff Cap) will allow Ofgem to cap energy […]

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By Priyanka Shrestha

New legislation to cap energy prices and help consumers save money is being introduced to Parliament today.

The Domestic Gas and Electricity (Tariff Cap) will allow Ofgem to cap energy tariffs until 2020, protecting 11 million households across the UK, who are currently on a standard variable or other default tariffs.

The cap, which could help save up to £100 a year, would be limited until 2020, with the option of extending it until 2023.

That’s in addition to five million vulnerable householders already protected by the safeguard tariff.

The Competition and Markets Authority’s review of the retail energy market found Big Six customers were paying £1.4 billion a year more than they should.

Prime Minister Theresa May said: “It’s often older people or those on low incomes who are stuck on rip-off energy tariffs so today we are introducing legislation to force energy companies to change their ways.

“Our energy price cap will cut bills for millions of families. This is another step we are taking to help people make ends meet as we build a country that woks for everyone.”

The Bill is part of a package of measures being introduced to increase competition and lower prices, including the rollout of smart meters and initiatives to promote smarter and faster switching.