Energy suppliers will be forced to tell customers about the cheapest tariff they have on offer under proposed reforms unveiled by the energy watchdog today.
Ofgem said its plans will put an end to complex tariffs and will usher in a ‘simpler, clearer, fairer and more competitive’ energy market.
But the proposals do not incorporate a requirement for companies to actually move customers to the cheapest tariff available – as suggested by Prime Minister David Cameron in a surprise announcement in the House of Commons this week.
Mr Cameron sparked confusion during Prime Minister’s Questions when he said the government would be legislating to ensure energy companies were required to give the lowest tariff to customers – rather than simply informing consumers of what is available.
But his comments backfired when Liberal Democrat Energy Secretary Ed Davey failed to back the move, while Conservative Energy Minister John Hayes told MPs ‘different options’ were being considered.
No 10 said energy firms would be obliged only to ‘offer’ the cheapest tariffs.
The Prime Minister last night insisted he was ‘on the side of hard-working families’, and that the government would be using the Energy Bill to ensure customers get the lowest tariffs.
When pressed on why the proposals do not include a requirement for companies to switch customers to the lowest tariff, as suggested by Mr Cameron, Ofgem said it believed competition was still the best way to protect consumers in the market.