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| Version 5 | Version 6 |
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| Ed Davey to set out 'cheapest energy tariff' plan | Ed Davey to set out 'cheapest energy tariff' plan |
| (about 1 hour later) | |
| The government is to set out how it intends to force energy firms to offer customers the lowest suitable tariff. | The government is to set out how it intends to force energy firms to offer customers the lowest suitable tariff. |
| Energy Secretary Ed Davey will set out plans to fulfil the prime minister's pledge to bring in legislation. | |
| He will say that companies will have to reduce the number of tariffs to four each for gas and electricity, in a bid to cut the confusing array on offer. | He will say that companies will have to reduce the number of tariffs to four each for gas and electricity, in a bid to cut the confusing array on offer. |
| However, consumer groups and energy firms warned it could mean some of the cheapest tariffs on offer disappear. | However, consumer groups and energy firms warned it could mean some of the cheapest tariffs on offer disappear. |
| Labour welcomed plans to make tariffs simpler, but said the government also needed to reform the energy market and create a new watchdog to force companies to pass on price cuts. | Labour welcomed plans to make tariffs simpler, but said the government also needed to reform the energy market and create a new watchdog to force companies to pass on price cuts. |
| David Cameron's pledge appeared to be a surprise to the energy department at the time. | David Cameron's pledge appeared to be a surprise to the energy department at the time. |
| Automatic switch | Automatic switch |
| In an appearance before Parliament's energy select committee, Mr Davey is expected to say that firms will offer just four core tariffs for both gas and electricity - a fixed price for a fixed term and a standard variable rate, with two others based on different criteria such as payment method or whether renewable energy is a factor. | In an appearance before Parliament's energy select committee, Mr Davey is expected to say that firms will offer just four core tariffs for both gas and electricity - a fixed price for a fixed term and a standard variable rate, with two others based on different criteria such as payment method or whether renewable energy is a factor. |
| Under the plans, companies would be forced to switch customers automatically to the lowest suitable tariff unless they objected. | Under the plans, companies would be forced to switch customers automatically to the lowest suitable tariff unless they objected. |
| BBC deputy political editor James Landale says Downing Street insists this means Mr Cameron will have fulfilled his promise. | BBC deputy political editor James Landale says Downing Street insists this means Mr Cameron will have fulfilled his promise. |
| "But the real test will be whether people actually see smaller bills at a time when energy prices are rising," our correspondent adds. | "But the real test will be whether people actually see smaller bills at a time when energy prices are rising," our correspondent adds. |
| Energy regulator Ofgem had been looking into pricing for some time, and published its proposals just days after Mr Cameron's pledge, but it did not go as far as the government intends to. | Energy regulator Ofgem had been looking into pricing for some time, and published its proposals just days after Mr Cameron's pledge, but it did not go as far as the government intends to. |
| Ofgem's proposals included banning complex multi-tier tariffs, new personalised information to help consumers find their best deal, and ensuring customers default to the cheapest option at the end of a fixed-term contract. | Ofgem's proposals included banning complex multi-tier tariffs, new personalised information to help consumers find their best deal, and ensuring customers default to the cheapest option at the end of a fixed-term contract. |
| Currently most people buy their gas and electricity from just six big suppliers, although there are smaller suppliers, amid a vast selection of tariffs. | Currently most people buy their gas and electricity from just six big suppliers, although there are smaller suppliers, amid a vast selection of tariffs. |
| Renewable targets | Renewable targets |
| The structure of the charges can vary depending on payment method (by direct debit, pre-payment meter, or credit transfer such as cheque), on whether it is an internet-only tariff, which part of the country the customer lives in, if the deal involves a fixed price, when the deal was launched, how long it lasts, and so on. | The structure of the charges can vary depending on payment method (by direct debit, pre-payment meter, or credit transfer such as cheque), on whether it is an internet-only tariff, which part of the country the customer lives in, if the deal involves a fixed price, when the deal was launched, how long it lasts, and so on. |
| Commenting ahead of the government's expected announcement, business and consumer groups warned the plans could mean energy users paying more. | |
| The Institute of Directors said that restricting choice would simply allow energy companies to increase their lowest tariff, ensuring a higher minimum price for consumers. | |
| "Instead, the government should be promoting competition and making it easier for new companies to enter the energy market." | |
| Angela Knight, chief executive of Energy UK, which represents the major suppliers, said any fall in energy bills could be limited because about half a bill is made up of costs other than energy - such as upgrading infrastructure, insulating homes and environmental levies. | |
| Shadow energy minister Tom Greatex said: "Anything that can help simplify tariffs, and we've been calling for it for over a year, is going to be a good thing, but the devil will be in the detail. | Shadow energy minister Tom Greatex said: "Anything that can help simplify tariffs, and we've been calling for it for over a year, is going to be a good thing, but the devil will be in the detail. |
| "And this on its own isn't going to fix the problem. We need tariff simplification, but we also need fundamental reform of the market itself, particularly the way the wholesale market works." | "And this on its own isn't going to fix the problem. We need tariff simplification, but we also need fundamental reform of the market itself, particularly the way the wholesale market works." |
| Meanwhile, MPs have urged Mr Cameron to end uncertainty for investors and set clear targets for clean energy in 2030. | Meanwhile, MPs have urged Mr Cameron to end uncertainty for investors and set clear targets for clean energy in 2030. |
| The Environmental Audit Committee says firms will only invest enough in new renewables if the 2030 target is fixed in the forthcoming Energy Bill. | The Environmental Audit Committee says firms will only invest enough in new renewables if the 2030 target is fixed in the forthcoming Energy Bill. |
| But Chancellor George Osborne rejects the target - and BBC News understands he is now being backed by the prime minister. | But Chancellor George Osborne rejects the target - and BBC News understands he is now being backed by the prime minister. |
| The coalition is seeking a compromise to allow the Liberal Democrats to retain pride in their flagship bill. | The coalition is seeking a compromise to allow the Liberal Democrats to retain pride in their flagship bill. |