New law to force firms to offer lowest tariff

David Cameron has announced that energy firms will be forced to give customers the cheapest available tariff under new legislation.

Amid mounting concern about rocketing fuel bills, the Prime Minister signalled plans to introduce new laws to tackle the often-confusing array of tariffs.

“We will be legislating so that energy companies have to give the lowest tariff to their customers,” he told MPs during Prime Minister’s Questions.

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His move follows above-inflation price rises by major energy companies in recent days.

Ministers have previously encouraged consumers to shop around for the best available deals. They have also announced moves to require energy companies to inform their customers if they could be on cheaper tariffs.

But the forthcoming Energy Bill will go further by introducing a requirement for companies to give people the best tariff for their circumstances.

The move is intended to tackle concerns that many householders are already paying more than they need to because of the bewildering number of deals available.

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Mr Cameron’s announcement came as he, Deputy Prime Minister Nick Clegg and Chancellor George Osborne were expected to hold a meeting on the Government’s energy policy today.

Labour said the initiative was an admission of failure by the PM after the typical dual-fuel energy bill had risen by more than £200 since the Coalition came to power.

Shadow energy secretary Caroline Flint said: “The Government’s last-minute decision...is an admission that their ‘do nothing’ energy policy over the last two years has failed.”

Consumer campaign group Which? said the announcement was a “big moment”.