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Energy companies to be forced to put customers on cheapest tariff

Plans are a step towards a simpler energy market

Houses of Parliament

Energy secretary Ed Davey confirmed the government will limit the number of energy tariffs companies offer their customers to four in total.

The energy secretary updated MPs this evening following the Prime Minister’s promise last month to legislate to ensure that consumers are given the lowest energy tariff by their supplier.

Mr Davey’s announcement affirmed the Prime Minister’s commitment. Energy customers will be moved onto the cheapest energy deal offered by their existing supplier, but will still be able to choose the most suitable tariff for their needs.

Energy commitment to become reality

Which? executive director Richard Lloyd welcomed the announcement, but highlighted that we still need to address fairness and competition in the energy market:

‘Today’s announcement means the Prime Minister’s commitment should become a reality. However, to keep energy bills down, there must be more effective competition between suppliers in the energy market.’

Four tariffs per fuel

Under the new plans energy suppliers will only be able to offer four energy tariffs per fuel. Mr Lloyd suggested the government should do more to help consumers choose the cheapest tariff for them:

‘Prices will only be kept as low as possible if customers are able to easily compare their current deal against the rest of the market, and can easily switch. So the government must also ensure energy prices are presented in a clear, consistent and simple way.’

Independent review still needed

Which? has outlined its concerns over the lack of transparency in the energy market. We have seen inflation-busting energy bill hikes at the same time as large profit announcements from energy suppliers, so people will rightly be questioning whether they’re paying a fair price for their energy.

We are repeating our call for the government to launch an urgent and swift independent review in to what’s really behind the rising cost of energy.

Cost of gas and electricity

The government’s new measures are not expected to come into effect until 2014. You can make sure that you’re on the best energy deal now by comparing gas and electricity prices using our energy comparison service Which? Switch.

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