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Energy bills row: Cameron clarifies his surprise announcement

18 October 2012

6:05 PM

18 October 2012

6:05 PM

David Cameron has arrived in Brussels for a meeting of the European Council, and has offered further helpful clarification of what exactly he means to do about energy bills. The Prime Minister said:

‘I want to be on the side of hard-pressed, hard-working families who often struggle to pay energy bills. That’s what I said in the House of Commons yesterday. We’re going to use the forthcoming legislation, the energy bill, coming up this year so that we make sure, we ensure that customers get the lowest tariffs. That’s what we’re going to do.’

This is still different to what the Prime Minister said in the Commons yesterday. Privately, the government is aware that this is a problem: Paul Waugh has been leaked a list of ‘lines to take’ which includes a model answer to the question ‘why won’t you say now that you will force suppliers to do it? The PM said it?’. But if we’re in a forgiving mood and pretending that he got a few words wrong in the heat of Prime Minister’s questions, the Government’s plans are now, or at least for the next hour until someone else disagrees with them, as follows:

The forthcoming Energy Bill will set out legislation ensuring that consumers get the lowest tariffs from their energy provider. It is not yet clear how this will work, but ministers are considering compelling providers to tell customers that they are going to be automatically switched to the lowest direct debit tariff from the same provider. Those lines to take tell MPs to argue:

‘This is about making sure that those who are not closely engaged in the market, and don’t switch, are not left behind on legacy deals that give them uncompetitive rates.’

The plans will build on the voluntary agreement with energy suppliers that Nick Clegg announced in April. That agreement included the following measures:

  • Customers can request that their energy supplier help them identify the best tariff to suit their needs.
  • Energy suppliers will write to customers and provide the best tariff from autumn 2012.
  • From autumn 2012, suppliers will contact customers annually to tell them what the best tariff options are for them and how to get them.
  • Vulnerable customers receiving the Warm Home Discount will also receive additional advice annually on the best tariff.
  • Government and the energy companies will consider putting QR codes on energy bills to help customers switch tariffs using their mobile phones.
  • When a customer moves to a new energy company, their old supplier will pass on their consumption data.

We may well see these measures in the forthcoming legislation. The most important thing for ministers to remember as they hold more of the meetings which they’ve been so very keen to assure everyone they’ve been holding for months on the matter is that the legislation must not unintentionally increase bills overall by placing more burdens on the suppliers.

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