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Energy bills row: Cameron clarifies his surprise announcement

18 October 2012

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:

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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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Show comments
  • Charles Gibson

    The Energy companies will never be controlled by this government as long as they issue shares, about time ministers were made to declare what holdings they or their relatives have in these companies.

  • @PhilKean1

    “ENERGY BILLS ROW” How do these convenient distractions always pop up at the wrong time?

    “THE SINGLE MARKET” – A sanitised description of EU Federalism. An essential constituent necessary to create a Chinese style one-party-state Government across Europe – including for the UK.

    An entrapment British Governments have inexplicably promoted as being advantageous for the UK, but which – in reality, as it speeds towards completion – makes leaving the EU that much harder for Britain.

    As our minds are diverted by petty distractions, such as pleb-gate and energy bills, Cameron is meeting EU leaders in Brussels helping them to strip the British people, and the European peoples, of their precious democracy.

    • HooksLaw

      Pointless rubbish.

      This article by Andrew Lillico gives a fair assessment of how the EU is going to change and how we will likely reform our relationship with it.

      The obvious point he makes of course is this
      ‘Suppose, instead, we preferred to leave. What then? That would depend very
      much on what we did instead of the EU – a matter little discussed in any
      depth in Eurosceptic debates.’
      and this
      ‘ First, the EU as we have known it is over;
      second, that will have economic implications and those arguing for different
      EU policies should tell us what they think those economic implications are.’

  • TomTom

    When you are in credit throughout the year and find your utility wants to increase your direct debit you know they are working as a bank trying to keep 2 months payment as a float and that this has gotten worse since QE reduced their interest income. It is regular and persistent forcing higher direct debits through unless stamped on. Direct Debit is a fraud

    • Magnolia

      My new supplier gives 3% interest on accounts in credit.
      Shop around.

      • TomTom

        So name your supplier

        • Magnolia

          OVO Energy.

          • Charles Gibson

            Andrew Neil interviewed the head of OVO on Daily Politics this week,
            Very interesting conversation. All should read.

            • Magnolia

              Thanks Charles, found it on iPlayer Daily Politics, 18/10/12, about 30mins in.
              More competition the man says and I could not agree more. More competition will solve our economic problems, not by driving us in to the ground with low wages, but by freeing us from winner takes all big business, which prevents innovation and development to the detriment and loss of all. Big state and big business are blind alleys for mankind and they feed off each other.

  • Heartless etc.,

    Does the grinning H2B possess the ability to clarify nonsense? Or will this involve an attempt to again hoodwink gullible people?

  • Magnolia

    I’ve heard the expression ‘hard-pressed, hard-working families’ before from somewhere….ah yes, weren’t the ‘hard-working families’ a favourite of Mr Brown for a good long time?
    How can we justify an energy policy which gives subsidies to ‘rich’ people, to pay for them to have an energy saving from solar panels and individual wind turbines, at the expense of an economically unsustainable increase on everyone else’s electricity bills?
    Why should the poor old lady, who sits in a coat all day because she can’t afford to heat her house, pay for the rich old lady to have an individual wind turbine to save on her fuel bills?
    Competition is important and so is a simple and easy pricing structure but at the end of the day, it’s also important for the state to stop choosing who and what wins because it doesn’t work very well in the long run and it’s always wasteful and expensive for tax payers as well as for all of those hard-pressed families.

  • alexsandr

    he would do better stopping the windmill subsidy and a cut in the VAT on fuel bills

  • James Randall

    I expect there will still be different tariffs, but these will be across different products (e.g. dual fuel vs just gas/electricity). This would mean you may be on the lowest tariff for the product you buy, but not necessarily the lowest overall tariff.

    • dorothy wilson

      The dual fuel tariff is discriminatory to those of us who live in areas where there is not a gas supply. It should be banned.

      • HooksLaw

        Its not discriminatory. You do not have gas, thats not being discriminatory.

      • Charles Gibson

        Agree, as should the higher annual discount for dual fuel payment. Where there are no gas supplies and you use one fuel for all your heating cooking etc. the higher discount should apply.

  • Dominic Allkins

    If everyone is on the lowest tariff, is there any point in having any other tariffs?

    Just asking.

    • dalai guevara

      It’s the new Tory policy of maximising competition by reducing options, stupid 😉 Clever stuff.

    • LondonStatto

      “The lowest” tariff will depend on the household’s particular energy usage distribution.


    • telemachus

      He should reserve his efforts to help the fuel povity that will kill folk this winter

  • Hobbes

    Actually, I’ll go one better. An unintended consequence of harmonising male and female driving premiums in the EU was to increase female premiums, rather than decrease male premiums.

    In this case all they’ll do is roll everyone up onto the most expensive basic tarriff, then remove all the others. That way everyone pays the same, and it’s an inordinate sum. I do honestly wonder if the Conservatives have a better idea of policy than the yellow turncoats now.

  • Sisyphus21

    This one has surely got to shoot to the top of the list for policies that will trigger the law of unintended consequences. Like the energy companies are going to say, “Oh, alright then. We’ll just automatically put all of our customers on the lowest tarriff we offered before these regulations were introduced,” which is Cameron wants people to think will happen.

    Ground control to brain cell, come in!

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