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Ofgem energy plans do not go far enough, says No 10 Ofgem energy plans do not go far enough, says No 10
(about 2 hours later)
Downing Street has insisted it will press ahead with controversial legislation to require electricity companies to put some customers on cheaper tariffs, saying plans from the gas regulator, Ofgem, outlined on Friday did not go far enough.Downing Street has insisted it will press ahead with controversial legislation to require electricity companies to put some customers on cheaper tariffs, saying plans from the gas regulator, Ofgem, outlined on Friday did not go far enough.
No 10 said that while it had been aware Ofgem was going to set out proposals this week, this had not prompted David Cameron's initiative on Wednesday, when he appeared to commit the government to forcing energy companies to put all customers on the lowest rate. It added that it had not been briefed on the detail of the Ofgem plans when Cameron made his remarks and said that while Ofgem's commitment to greater transparency and its plans to require companies to inform customers of cheaper deals were welcome, they were not sufficient.No 10 said that while it had been aware Ofgem was going to set out proposals this week, this had not prompted David Cameron's initiative on Wednesday, when he appeared to commit the government to forcing energy companies to put all customers on the lowest rate. It added that it had not been briefed on the detail of the Ofgem plans when Cameron made his remarks and said that while Ofgem's commitment to greater transparency and its plans to require companies to inform customers of cheaper deals were welcome, they were not sufficient.
A spokeswoman for the prime minister claimed Ofgem's plans, which would simplify bills and prevent suppliers offering more than four primary tariffs for each fuel type, would sit alongside Cameron's stated plans for legislation that could force suppliers to give customers the cheapest deals.A spokeswoman for the prime minister claimed Ofgem's plans, which would simplify bills and prevent suppliers offering more than four primary tariffs for each fuel type, would sit alongside Cameron's stated plans for legislation that could force suppliers to give customers the cheapest deals.
On Wednesday the prime minister said he would oblige energy companies to provide customers with the lowest tariff. The next day, he was forced to admit he had only raised an option for inclusion in the energy bill. He said he was considering requiring energy companies to put some direct debit customers on low tariffs with a customer's right to opt out.On Wednesday the prime minister said he would oblige energy companies to provide customers with the lowest tariff. The next day, he was forced to admit he had only raised an option for inclusion in the energy bill. He said he was considering requiring energy companies to put some direct debit customers on low tariffs with a customer's right to opt out.
His announcement was criticised by consumer groups and Labour as unworkable.His announcement was criticised by consumer groups and Labour as unworkable.
Downing Street said the legislation would complement Ofgem's changes. "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."Downing Street said the legislation would complement Ofgem's changes. "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."
Asked whether the legislation would override Ofgem's proposals, she replied that they would be "taken into account".Asked whether the legislation would override Ofgem's proposals, she replied that they would be "taken into account".
The Ofgem plans to force suppliers to inform householders about their cheapest deals and greatly simplify the number of pricing plans are part of what it is calling the biggest shakeup of the market for domestic energy for more than a decade.The Ofgem plans to force suppliers to inform householders about their cheapest deals and greatly simplify the number of pricing plans are part of what it is calling the biggest shakeup of the market for domestic energy for more than a decade.
Ofgem's proposals will, according to its chief executive, Alistair Buchanan, bring a "simpler, clearer, fairer and more competitive energy market for all consumers".Ofgem's proposals will, according to its chief executive, Alistair Buchanan, bring a "simpler, clearer, fairer and more competitive energy market for all consumers".
Companies would be forced to put consumers on the lowest tariffs only in very special circumstances.Companies would be forced to put consumers on the lowest tariffs only in very special circumstances.
Audrey Gallacher, director of energy at Consumer Focus, said: "This is a positive package of measures which should help to make the energy market clearer and simpler. Particularly welcome are proposals which could cut the number of available tariffs by half. Ofgem needed to act to make the energy maze less impenetrable and these are important and overdue measures.Audrey Gallacher, director of energy at Consumer Focus, said: "This is a positive package of measures which should help to make the energy market clearer and simpler. Particularly welcome are proposals which could cut the number of available tariffs by half. Ofgem needed to act to make the energy maze less impenetrable and these are important and overdue measures.
"Events of recent days have created more heat than light. Government and regulators need to plot a clear and consistent path on energy market reforms which puts the interests of consumers at the heart of the process. Regulation, legislation and effective competition all play a role in delivering an energy market that works for, not against consumers.""Events of recent days have created more heat than light. Government and regulators need to plot a clear and consistent path on energy market reforms which puts the interests of consumers at the heart of the process. Regulation, legislation and effective competition all play a role in delivering an energy market that works for, not against consumers."
The chairman of the energy select committee, Tim Yeo, wrote to the energy secretary on Friday night expressing his surprise at Cameron's proposals. He warned: "The later the bill reaches the statute book, the later investment in urgently needed new electricity-generating capacity, and in particular low-carbon generation, will come forward."The chairman of the energy select committee, Tim Yeo, wrote to the energy secretary on Friday night expressing his surprise at Cameron's proposals. He warned: "The later the bill reaches the statute book, the later investment in urgently needed new electricity-generating capacity, and in particular low-carbon generation, will come forward."
Knight's moves
Angela Knight must relish a challenge. The woman who defended the industry during one of the worst periods in its history now takes the flak for energy suppliers. As chief executive of trade association Energy UK, she has to stand up for firms pilloried for driving up prices and trumpeting record profits. Knight became chairman of the British Bankers' Association on April 1, 2007 just months before the queues formed outside branches of Northern Rock in the first run on a British bank since the 19th century. It was the start of an unprecedented crisis in the industry.
The former Tory MP rose from the backbenches to economic secretary to the Treasury within three years, only to be swept away by the wave of Labour MPs that brought Tony Blair to power in 1997. Keen to get away from traditional female-only professions, she studied chemistry at Bristol university, leading to an early career in heavy industry, when she set up and ran Cook & Knight Metallurgical Processors with her then husband David.