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Ministers to face MPs over energy tariff plan Minister vows 'best energy deal'
(35 minutes later)
Ministers will be forced to explain to MPs a pledge by the prime minister to make gas and electricity suppliers offer customers their lowest tariffs. New laws will help consumers "get the best deal" on their gas and electricity bills, energy Minister John Hayes has said.
The statement, expected at 10:30BST, follows an urgent question by Labour, who have been critical of the policy. But he failed to confirm David Cameron's pledge that companies would be forced to offer their lowest tariffs.
David Cameron told MPs that legislation would be brought before Parliament, amid concern over rising energy bills. He said the proposed legislation would first be discussed with the industry and debated by MPs.
But later the Department for Energy said it was looking "at all options" to help customers get the best tariff. Labour said the government's policy was in "chaos".
BBC industry correspondent John Moylan says that on the face of it Mr Cameron's announcement on Wednesday amounts to a major change in energy policy - instead of consumers having to seek out the best deals, firms would have to give customers the lowest tariff. Mr Hayes said the Energy Bill, which the government plans to publish next month, will reform the energy market and increase competition.
But there is still little detail on how this would actually work, our correspondent says. He said the government needed a "robust" relationship with the six big energy firms and would take the "necessary steps to ensure people get the best possible deal".
One suggestion is that a supplier would send a letter outlining a better deal a customer would be automatically switched to - unless they opted out. A "simplification of tariffs" would be a priority for the reforms, Mr Hayes said.
'Volatile global prices' At Prime Minister's Questions on Wednesday, Mr Cameron said: "I can announce... that we will be legislating so that energy companies have to give the lowest tariff to their customers, something that Labour didn't do in 13 years, even though the leader of the Labour Party could have done because he had the job."
The main energy firms say they knew nothing of the plan or of the government's intention to put this into legislation in the forthcoming Energy Bill. However, the Department of Energy and Climate Change later played down suggestions that companies would be forced to move customers onto cheaper deals.
But on Wednesday night, our correspondent adds, the Department of Energy and Climate Change was playing down suggestions that companies would be forced to move customers onto cheaper deals. The main energy firms said they knew nothing of the plan or of the government's intention to put it into legislation.
A spokesman for the department said the government had no intention of ending competition - as some critics suggest the plan would - and was looking "at all options" to help consumers get the best tariff, which might not necessarily be the cheapest. In a speech on Thursday, Energy Secretary Ed Davey said: "Our reforms will stabilise consumer prices, we will shift decisively away from how volatile global prices affect the consumer price."
Some households might not want to pay their bills by automatic direct debit to their banks - often the cheapest option - or would want to take energy only from green sources, he added.
In a speech on Thursday, Energy Secretary Ed Davey confirmed the government is to publish the Energy Bill in November, for second reading before Christmas.
He said: "Our reforms will stabilise consumer prices, we will shift decisively away from how volatile global prices affect the consumer price."
"Making sure we have competitive markets and consumers have the lowest price is my number one priority.""Making sure we have competitive markets and consumers have the lowest price is my number one priority."
Asked specifically about the prime minister's announcement on Wednesday, Mr Davey said the energy regulator Ofgem had already advised there should be fewer tariffs.
Last week Npower and British Gas both announced that they were increasing gas and electricity prices in the UK. They blamed the government's policies, as well as wholesale prices.
Ministers have previously encouraged consumers to shop around and make sure they are on the best available deals, but consumer groups have complained that this is making little difference amid rising costs.
'Killing competition'
At Prime Minister's Questions, Mr Cameron said: "I can announce... that we will be legislating so that energy companies have to give the lowest tariff to their customers, something that Labour didn't do in 13 years, even though the leader of the Labour Party could have done because he had the job."
Mr Cameron said it would be "welcome" news for households facing rising energy costs.
But speaking later on BBC Two's Newsnight programme, shadow energy secretary Caroline Flint suggested confusion surrounded the policy.
"The truth is... this policy isn't going anywhere because the prime minister actually announced a policy that within 10 hours has disappeared," she said.
Ms Flint added that there was a need for more competition within the energy sector.
She said: "We need a more competitive market. Six companies dominate 99% of the customer base in the UK. So what do we need? We need a tougher regulator, and we have announced that we would abolish Ofgem and have a tougher regulator.
"We need transparency, so we can see when companies say 'We can't do this because we need to invest', whether what they are saying is right. And we need to know that when wholesale prices go down they pass on those cuts to the consumers."
Consumer group uSwitch, which runs a price comparison website, said the policy announced by the prime minister would actually disadvantage consumers.
Anne Robinson, director of consumer policy, said: "This has to be a mistake - the unintended consequences would be to kill competition."
She said there would be "no spur, no choice, no innovation and no reason for consumers to engage any more".
But Stephen Fitzpatrick, from Ovo Energy, told BBC Radio 4's Today programme the announcement was "great news" for consumers and would help break the "stranglehold" of the big six energy companies.
"Competition in the energy market has never been so poor... I don't see that consumers are going to lose out from this at all. I think most people will see their bills come down," he said.
"I think some of the larger energy companies might withdraw some of their subsidised deals, but what you're going to see is this surge of competition from independent energy companies."
What do you think about plans for gas and electricity suppliers to offer customers their lowest tariffs? Do you think a change in energy policy is needed? Please contact us using the form below.What do you think about plans for gas and electricity suppliers to offer customers their lowest tariffs? Do you think a change in energy policy is needed? Please contact us using the form below.