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| Energy firms to be forced to tell customers of cheapest tariff | Energy firms to be forced to tell customers of cheapest tariff |
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| Ofgem plans to force energy suppliers to inform householders about their cheapest deals and greatly simplify the number of pricing plans on offer as part of what the industry watchdog is calling the biggest shakeup of the market for domestic energy for more than a decade. | Ofgem plans to force energy suppliers to inform householders about their cheapest deals and greatly simplify the number of pricing plans on offer as part of what the industry watchdog is calling the biggest shakeup of the market for domestic energy for more than a decade. |
| After canvassing the views of thousands of customers, Ofgem is drawing together plans to prevent suppliers from offering any more than four primary tariffs for each fuel type, and to greatly simplify bills. The proposals would, according to Ofgem's chief executive, Alistair Buchanan, bring a "simpler, clearer, fairer and more competitive energy market for all consumers". | After canvassing the views of thousands of customers, Ofgem is drawing together plans to prevent suppliers from offering any more than four primary tariffs for each fuel type, and to greatly simplify bills. The proposals would, according to Ofgem's chief executive, Alistair Buchanan, bring a "simpler, clearer, fairer and more competitive energy market for all consumers". |
| The Ofgem proposals come in the same week as a government announcement that energy companies would be obliged to not only inform customers of their lowest tariff but place them on this by default. This proposal was put forward by David Cameron during prime minister's questions on Wednesday, to the surprise of ministers at the Department for Energy and Climate Change. | The Ofgem proposals come in the same week as a government announcement that energy companies would be obliged to not only inform customers of their lowest tariff but place them on this by default. This proposal was put forward by David Cameron during prime minister's questions on Wednesday, to the surprise of ministers at the Department for Energy and Climate Change. |
| Downing Street was again forced to defend Cameron's confused energy pricing policy on Friday following the Ofgem announcement. | |
| A spokeswoman for the prime minister claimed that Ofgem's proposals, which would prevent suppliers from offering any more than four primary tariffs for each fuel type, would sit alongside Cameron's stated plans for legislation which could force suppliers to give customers the cheapest deals. | |
| "We welcome the proposals that Ofgem have set out today. Their proposals will help make bills simpler and easier for consumers. This is complementary with what we are trying to achieve. It is really the same agenda. | |
| "We have been working with them for some time on this and will continue to work with them. As the prime minister said, we will use forthcoming legislation to ensure that people get the lowest tariffs," she said. | |
| Asked whether the government's proposed legislation would override Ofgem's proposals, the spokeswoman replied: "The energy bill will be published in due course and we will take into account the Ofgem proposals." | |
| On Thursday the junior energy minister, John Hayes, appeared unable to fully endorse Cameron's proposal when summoned to the Commons to answer an emergency question on the issue. The government is reportedly under pressure from energy companies to row back from Cameron's proposal, which would significantly restrict competition within the market. | |
| Even the seemingly less radical Ofgem proposals would bring significant change to the domestic energy market, which consumers have long complained has evolved into an impenetrable thicket of varying and ever-changing tariff types and confusing bills. | Even the seemingly less radical Ofgem proposals would bring significant change to the domestic energy market, which consumers have long complained has evolved into an impenetrable thicket of varying and ever-changing tariff types and confusing bills. |
| The Ofgem proposals, which have been worked on for more than a year, would involve suppliers being obliged to tell householders regularly about the cheapest tariff available to them, and even to switch vulnerable customers, those on fixed-rate deals that have expired or those on a "dead" tariff, one no longer available to new consumers. | The Ofgem proposals, which have been worked on for more than a year, would involve suppliers being obliged to tell householders regularly about the cheapest tariff available to them, and even to switch vulnerable customers, those on fixed-rate deals that have expired or those on a "dead" tariff, one no longer available to new consumers. |
| Bills would also be simplified, with tariffs expressed as a standing charge and single unit price and dual-fuel discounts shown separately as a monetary value rather than as a percentage. | Bills would also be simplified, with tariffs expressed as a standing charge and single unit price and dual-fuel discounts shown separately as a monetary value rather than as a percentage. |
| The plans were "the most radical reform of the market since competition was introduced", Ian Marlee, of Ofgem, told BBC Radio 4's Today programme. Asked why Ofgem was not pressing for the Cameron approach of moving all customers directly to the cheapest tariff rather than just telling them about it, Marlee argued that such an approach could curb innovations that may benefit householders, such as fixed deals. | The plans were "the most radical reform of the market since competition was introduced", Ian Marlee, of Ofgem, told BBC Radio 4's Today programme. Asked why Ofgem was not pressing for the Cameron approach of moving all customers directly to the cheapest tariff rather than just telling them about it, Marlee argued that such an approach could curb innovations that may benefit householders, such as fixed deals. |
| "We think that competition is still the best way to protect consumers in the market," he said. "We looked at the whole range of options, but the clear point here is that what we want to do is get an appropriate balance between allowing innovation in the market but making sure there isn't a complicated array of tariffs out there. That's what we think our proposals do." | "We think that competition is still the best way to protect consumers in the market," he said. "We looked at the whole range of options, but the clear point here is that what we want to do is get an appropriate balance between allowing innovation in the market but making sure there isn't a complicated array of tariffs out there. That's what we think our proposals do." |
| Angela Knight, the former Tory MP who is chief executive of Energy UK, the industry trade body, said companies felt that directly switching householders to the cheapest tariff could limit choice. "I think customers do want choice, and that choice is a good thing," she said. | Angela Knight, the former Tory MP who is chief executive of Energy UK, the industry trade body, said companies felt that directly switching householders to the cheapest tariff could limit choice. "I think customers do want choice, and that choice is a good thing," she said. |
| Even the Ofgem proposals would mark a radical change, she said. "What we have here is a pretty challenging set of requirements on the companies." | Even the Ofgem proposals would mark a radical change, she said. "What we have here is a pretty challenging set of requirements on the companies." |
| The energy secretary, Ed Davey, said he welcomed Ofgem's proposals, calling them "the sort of measures I have been urging for some time". | The energy secretary, Ed Davey, said he welcomed Ofgem's proposals, calling them "the sort of measures I have been urging for some time". |
| "I want an energy market where the suppliers have to work hard to win your business, and then work hard to keep it. Making bills simpler and easier, for instance by actually putting the best tariff on the bill, is a really important part of that." | "I want an energy market where the suppliers have to work hard to win your business, and then work hard to keep it. Making bills simpler and easier, for instance by actually putting the best tariff on the bill, is a really important part of that." |
| However, the shadow energy secretary, Caroline Flint, said the proposals were "tinkering at the margins". | However, the shadow energy secretary, Caroline Flint, said the proposals were "tinkering at the margins". |
| "We need to open up the books of the energy companies, but these reforms do nothing to improve the transparency of the prices these firms charge their customers." | "We need to open up the books of the energy companies, but these reforms do nothing to improve the transparency of the prices these firms charge their customers." |
| On Thursday night Cameron sought to bolster his energy commitments while conceding that his idea was only an option for the forthcoming energy bill. | On Thursday night Cameron sought to bolster his energy commitments while conceding that his idea was only an option for the forthcoming energy bill. |
| Speaking at the European Union summit in Brussels, the prime minister said: "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." | Speaking at the European Union summit in Brussels, the prime minister said: "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." |