An energy price cap must happen to stop the Big Six ‘ripping off’ loyal customers
The influential Commons Business and Energy committee slams the UK's major energy firms and calls the market 'broken'
A PRICE cap must be enforced on the Big Six energy firms urgently to stop them abusing loyal customers paying up to £300 more than others.
That's the verdict from the powerful Commons Business and Energy committee, which has branded the market as “broken” and slammed the biggest companies for years of overcharging.
And they ripped into sluggish regulator Ofgem for being too “slow and reluctant” to use its powers to step in and protect customers - especially the most vulnerable.
MPs said the gas and electricity giants had brought plans to limit bills on themselves as they backed plans for a temporary absolute cap to fix the problem.
Labour’s Rachel Reeves, who chairs the committee, said bosses had been complacent for too long about ripping off customers.
She 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.
How to switch suppliers and save £300
SWITCHING suppliers is the best way you can cut your energy bills. But recent research from MoneySuperMarket found that households are throwing away up to £300 a year by not bothering. Here's what you need to do.
Shop around - If you're on an expensive Standard Variable Tariff (SVT) deal you are throwing Away up to £300 a year. Use a comparison site like MoneySuperMarket.com or EnergyHelpline.com to see what best deals are available to you.
The cheapest deals are usually found online and are fixed deals - meaning you'll pay a fixed amount usually for 12 months.
2. Switch - When you've found one, all you have to do is contact the new supplier.
It helps to have the following information - which you can find on your bill - to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won't be interrupted in that time.
"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 standard variable tariffs for years.
"Their recent feeble efforts to move consumers off these tariffs have only served to highlight the need for this intervention."
Business Secretary Greg Clark published draft laws for an absolute cap on "rip-off" energy tariffs last year.
But regulators have warned the cap on 17million bills may not be in place until the start of 2019.
Customers are paying £1.4 billion a year too much under the current system, with at least 12 million stuck on poor-value tariffs.
MPs said there was a "clear lack of will" on the part of the Big Six to take the steps needed to address pricing problems.
Citizens Advice said loyal and vulnerable customers had been “ripped off” for too long.
Chief executive Gillian Guy said: “An absolute cap, as recommended by the committee, is crucial to securing protection for the largest number of customers while continuing to provide competition in the market. This should apply to all default tariffs.
“However, we continue to hold reservations over the inclusion of a sunset clause tied to an arbitrary date. The decision to remove consumer protections should be dependent on whether the need for such protections still exists, not a fixed calendar date.”
But Energy UK chief executive Lawrence Slade insisted a record one in six customers had switched last year.
He said: “The energy market is changing rapidly and has never offered so much choice.
“It’s vital the cap doesn’t halt the growth of competition which is helping customers to find a better deal and save on their energy bills.
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“It’s also important that the cap accurately reflects suppliers’ costs, most of which are out of their direct control.”
Last year The Sun’s Power to the People campaign forced British Gas to axe its rolling tariffs.
Around five million customers are on the tariffs with its SVT £75 a year more expensive than its cheapest internet-only deal.
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