Planned cap on energy bills should be introduced urgently

The Business, Energy and Industrial Strategy Committee has warned that the government's planned cap on energy bills should be introduced urgently to stop customers from being overcharged.

The committee, which has been examining the government's draft bill to cap energy tariffs, says that the current energy market is broken and penalises customer loyalty. Claiming that the Big Six have brought the introduction of a price cap upon themselves by their raising of prices in 2017, the report finds that competition in the domestic energy market is not working effectively for 12 million customers stuck on poor-value tariffs.

The energy regulator Ofgem was also criticised for being ‘too slow and reluctant’ to use its powers to protect the interests of customers, urging the body to be faster and more proactive in using its extensive powers to protect consumers from overcharging in the future.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy (BEIS) Committee, said: "The energy market is broken. Energy is an essential good and yet millions of customers are ripped off for staying loyal to their energy provider. An energy price cap is now necessary and the government must act urgently to ensure it is in place to protect customers next winter. The Big Six energy companies might whine and wail about the introduction of a price cap but they’ve been overcharging their customers on default and SVTs for years and their recent feeble efforts to move consumers off these tariffs has only served to highlight the need for this intervention."

Business Secretary Greg Clark has said that the government's plan to introduce a price cap would protect consumers from high energy bills.

Meanwhile, the government has launched a consultation asking for views on amending the Digital Economy Act to bring in data-sharing measures that could help bring down the bills of those most at risk of fuel poverty.