THERESA MAY’s radical energy price cap may not be imposed on the Big Six for over a YEAR – regulators claimed yesterday.
The Government will today (Thursday) publish draft legislation to slap price controls on 18 million rip-off, standard variable tariffs.
But Ofgem chief Dermot Nolan yesterday warned he will not be able to act until the new bill passes through Parliament and the regulator carries out necessary “consultation”.
Sources claimed this could take anywhere between 14 months to two years.
Just last week Business Secretary Greg Clark hinted a cap would be in place by this winter – shaving as much as £100 from gas and electricity charges.
Furious MPs last night demanded the Government fast-track the cap by amending the existing Energy Act, introduced in 2010.
Tory campaigner John Penrose stormed: “Households shouldn’t have to wait two years for the cavalry to arrive.
“We should look at using secondary legislation to get this through Parliament quickly and end the rip-off before the cold winter month start to bite.
Labour’s ex-Shadow Energy Secretary Caroline Flint said the Government was giving the impression it didn’t want to tackle the Big Six.
She said: “I don’t know whether the delay is simply incompetence or resistance within the Government to intervening in this market.
“Either way millions of people face higher bills this winter, unless the Government gets its act together.”
Analysts said they believed the Big Six may “correct itself” before any cap can be applied by axing standard variable tariffs (SVTs) altogether.
The Sun last year revealed customers on default, SVTs were being charged up to £300 a year more for gas and electricity than those on the cheapest deals.
Theresa May promised to introduce a cap in the Conservative’s Election Manifesto before appearing to drop the pledge in the Queen’s Speech.
But she revived the plan and promised to act in her Tory Conference speech last week.
In comments released ahead of today’s draft bill, the PM said: “I have been clear that our broken energy market has to change.
“It has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much.
“Today’s publication of draft legislation is a vital step towards fixing that, and in offering crucial peace of mind for ordinary working families all over the country.”
Competition watchdogs last year claimed the Big Six were overcharging customers were ripping off customers by as much as £1.4 billion.
Ofgem introduced a price cap on four million prepayment tariffs in October and yesterday said it would be extending this to a further one million ‘vulnerable’ customers in February.
Speaking to the Sun, Dermot Nolan said the Big Six had brought the cap on themselves. He said: “I think in some fashion the larger companies have not displayed a real willingness to engage.”
A wind investment?
Yesterday, the Government announced that £560 million-worth of taxpayers’ cash would be ploughed into wind turbines early next year – subsidies that will eventually be picked up by bill payers. Energy Minister Richard Harrington said the subsidies would create “thousands of good jobs and attract billions pounds worth of investment”.
MOST READ IN POLITICS
More than a million vulnerable Brits will need to be protected from fat-cat energy giants for 15 YEARS, regulators say
MORE THAN a million vulnerable Brits will need to be protected from fat-cat energy giants for FIFTEEN YEARS, regulators claim. Ofgem chief Dermot Nolan said a form of Theresa May’s energy price cap may be required until 2030 given the number of low-income or “disengaged” customers vulnerable to profiteering. He told MPs: “Given the importance […]
MORE THAN a million vulnerable Brits will need to be protected from fat-cat energy giants for FIFTEEN YEARS, regulators claim.
Ofgem chief Dermot Nolan said a form of Theresa May’s energy price cap may be required until 2030 given the number of low-income or “disengaged” customers vulnerable to profiteering.
He told MPs: “Given the importance of energy, heat and light, my own sense is that even 10 to 15 years from now there will be a need to include vulnerable people in some form of safeguard tariff.”
His extraordinary comments came as he told MPs that energy giants were moving far too slowly in taking customers off rip-off default or standard variable tariffs (SVTs).
And he insisted Ofgem had to wait for Government legislation before introducing a nationwide energy price cap – for fear of being taken to the courts by the Big Six.
Theresa May last week launched draft laws to give regulators the power for an unprecedented price cap on 17 million SVTs – which can cost over £300 more than the cheapest gas and electricity deals on the market.
But experts have warned the legislative process means it could take a YEAR for the legislation to take effect.
Ofgem already has a cap on pre-payment rates and is extending this cap to a further one million ‘vulnerable’ Brits.
British Gas boss Sarwjit Sambhi yesterday refused five times to rule out taking legislative action if Ofgem introduced the nationwide cap before the Government’s law was on the statute book.
Stephen Fitzpatrick, the chief exec of fast-growing energy supplier Ovo, said an absolute cap was the only way to fix the broken energy market.
He told MPs: “In 19 years of deregulation nothing has worked.
“And since 2009 we have had 5 reviews, four by Ofgem, one by the Competition and Markets Authority.
“I’ve been here (in Westminster) five times answering the same questions and nothing else has worked.”
Ofgem chief Dermot Nolan insisted an absolute cap was a better solution than a ‘relative’ cap pushed by Tory backbenchers – which would set a maximum difference between the highest and cheapest deals.
He said it was “more likely to be harmful than positive” because suppliers could just axe cheaper deals. He told MPs: “We believe a relative cap would see suppliers keep SVTs relatively high and withdraw cheaper deals.
“This would not be good news for average customers.”
Greg Jackson of Octopus Energy said it was ridiculous that customers were expected to “shop around” for a better deal.
He said: “The idea you have to switch to avoid being ripped off is absurd.
“No one would expect to have to switch supermarket every year to save money so why wear it in energy?”
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Three million Brits to face winter owing energy companies £318MILLION – and many will not be able to pay off debt
NEARLY three million Brits are heading into winter owing energy suppliers a whopping £318MILLION, new figures claim. Switching site uSwitch yesterday laid bare the pain felt by customers – claiming ‘energy debt’ was up nine per cent on a year ago. The research comes just days before the Prime Minister is expected to confirm […]
NEARLY three million Brits are heading into winter owing energy suppliers a whopping £318MILLION, new figures claim.
Switching site uSwitch yesterday laid bare the pain felt by customers – claiming ‘energy debt’ was up nine per cent on a year ago.
uSwitch has claimed ‘energy debt’ is up nine per cent on a year ago[/caption]
The research comes just days before the Prime Minister is expected to confirm radical plans for a Government-backed cap on energy bills.
An announcement could come as early as tomorrow.
A report by uSwitch claimed that an unseasonably cold August meant Brits had been forced to turn up the heating early.
One in ten households – the equivalent of 2.6 million – owe their supplier £121. Almost a third have no repayment plan or cannot afford to pay the money back.
Claire Osborne, uSwitch energy expert, said households were “paying the price” for a barrage of price rises so far this year.
Citizens Advice says vulnerable Brits will have to choose between ‘heating and eating’[/caption]
She urged Brits to shop around for a better deal. “We’re only just into autumn but already millions of households are in debt to their energy supplier.
“A cheaper tariff could mean the difference between shivering through the winter or having a warm home.”
Citizens Advice last week demanded action from the Government on bills – saying vulnerable Brits were having to choose between “heating and eating”.
MOST READ IN POLITICS
Are you one of 4.5million renters missing out on £353 a year from your energy supplier?
MILLIONS of renters could be missing out on savings adding up to an average of £346 a year because they don’t realise they can switch to better energy deals, according to new research. Consumer group Which? believes that 4.5 million renters are missing out on huge savings. This is because most comparison websites automatically show […]
MILLIONS of renters could be missing out on savings adding up to an average of £346 a year because they don’t realise they can switch to better energy deals, according to new research.
Consumer group Which? believes that 4.5 million renters are missing out on huge savings.
This is because most comparison websites automatically show you the best deal based on annual savings.
Which? has launched a new energy comparison service where renters can compare the best detail based on their tenancy length.
As part of its research Which? found that half of renters have been with their current supplier for more than five years.
While a quarter of renters have never switched suppliers at all.
It believes that enters could be missing out on potential savings of an average of £346 over a year by switching from the most expensive Big Six standard variable tariff to the cheapest deal on the market.
Some tenants are put off switching because of terms in their contracts.
Many include clauses which ask renters to get the permission of the landlord before switching.
But what tenants don’t realise is that landlords should not hold them back from moving suppliers.
How to cut your energy bills now
YOU don't need to wait for the new legislation to get lower bills.
If in doubt, call your provider and ask them to move you to their cheapest tariff.
Better still, use a comparison website like MoneySuperMarket.com or Energyhelpline.com to find the very best deal for you.
The cheapest tariffs are usually found online and are fixed deals – meaning you guarantee how much you’ll pay for a set amount of time, usually 12 months.
Switching to a cheaper supplier could cut your bill by up to £300 a year.
The amount you pay varies depending on where you live and how much energy you use
MORE ON BILLS
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