Government introduces bill to cap high-cost energy tariffs
Legislation to bring down energy costs for around 11 million people will be introduced today, in a move that could save some households hundreds of pounds a year.
The new law means from next year energy regulator Ofgem can limit the amount companies can charge customers for their standard variable or other default tariffs until 2020.
At the moment about a third of households are on default tariffs, with some people currently paying £300 a year more than they need to because they are stuck on a high-cost plan.
Theresa May hailed the changes, saying: “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 works for everyone.”
Business Secretary Greg Clark added: “Energy prices for millions of households on default tariffs are still too high.
"Our new price cap will guarantee that consumers are protected from poor value tariffs and further bring down the £1.4 billion a year consumers have been overpaying.”
However Centrica, the company that owns British Gas, claimed the move would reduce competition and end up hurting consumers.
“Centrica agrees with the Government that Standard Variable Tariffs are a problem for customer engagement because they have no end date," a spokesperson said.
"We just do not agree with introducing price controls into a competitive market which will reduce competition and choice, and therefore impact consumers."