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Govt to restrict energy tariffs

Govt to restrict energy tariffs
Ed Davey has announced plans to force energy companies to simplify the tariffs they offer consumers, or risk having their licences changed.

Suppliers will now be allowed to offer only four tariffs to make it easier for customers to select the best deal.

“These proposals will really help simplify the tariffs – up until recently there’s been over 400 tariffs, which has been very confusing, and some of the energy companies have hidden behind that confusion. I want to simplify the tariffs so it’s easier for people to choose between tariffs to find out what’s best for them and so they get a better deal from their energy companies,” the Energy Secretary told BBC News.

He said the changes would come into effect by 2014, but called on suppliers to implement the reforms immediately.

The proposals come after weeks of confusion over the policy following the Prime Minister's pledge to legislate last month to force companies to give consumers the lowest deals.

But the chief executive of trade association Energy UK has hit out at the changes, saying the proposals to limit tariffs will "remove choice" from customers.

Speaking before the details were announced, Angela Knight told the Today programme: "It is the case that if you have restrictions and constraints then you can’t offer everything and you can’t offer the variety of choice you get offered at the moment."

Speaking ahead of the announcement, Shadow Energy Secretary Caroline Flint accused the Government of doing "nothing" to help families with rising energy bills, and urged the Prime Minister to create a tough new industry watchdog.

“The cheapest deal in an uncompetitive market will still not be a good deal," she said.

"Unless David Cameron stands up to vested interests in the energy market and creates a tough new watchdog with powers to force energy companies to pass on price cuts his warm words will be cold comfort to people worried about paying their fuel bill this winter."

Meanwhile, Mr Cameron has reportedly rejected demands from Mr Davey that he strip John Hayes of his green energy responsibilities following controversial comments the minister made about windfarms last month.

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