Cameron hails ‘huge 
step’ to fairer 
fuel bills

Mr Cameron said Ofgem’s reforms were a “huge step towards energy bills that are more fair for everyone”.

The Ofgem proposals will restrict suppliers to offering no more than four tariffs for electricity and gas, with clearer bills that will show their cheapest deal.

Energy companies will have to keep to strict standards of conduct, with the threat of fines for breaking the rules.

Mr Cameron said: “Even in these tough times when we’re having to take the difficult decisions needed to fix our economy, we’re doing everything we can to help hardworking people and families.

“That’s why I made a personal commitment to help get energy bills down – and I’m delighted that Ofgem are taking that forward. The package announced today is a huge step towards energy bills that are more fair for everyone.

“This is about putting people before profits. It’s about pensioners being better able to heat their homes in winter, and families better able to cope when the bills arrive.

“Our aim is that consumers will get the best possible energy tariff – no tricks, no loopholes – and we will use the powers we gained in the Energy Bill earlier this month to make sure this happens.

“The Bill will support this package, and make sure that all energy customers are put on their supplier’s lowest variable rate unless they choose otherwise.”

Energy Secretary Edward Davey said: “We are confident that Ofgem’s reforms will achieve our aim of ensuring that consumers get their supplier’s lowest variable rate unless they choose otherwise, 
and we have taken additional powers through the Energy Bill to ensure this will happen even if Ofgem’s reforms are delayed or frustrated.”

A final decision on whether to proceed with the reforms is due to be taken in May and unless an appeal is lodged the new standards of conduct will be introduced in the summer.

The cap on tariff numbers and the other reforms are due to be in place from next winter

Ofgem chief executive Alistair Buchanan said: “We know suppliers are serious about wanting to restore consumer trust and they need to grasp this golden opportunity to change their behaviour and get behind Ofgem’s reforms so consumers get the simpler, clearer and fairer energy market they deserve.

“My message to the suppliers is ‘don’t wait for the legal process to take effect’. Most have already embraced the reform agenda and now the way is clear for all of them to work with Ofgem to bring in reforms as soon as possible.”

Richard Lloyd, Which? executive director, said: “These moves will help people to get a better deal from their existing supplier but do not go far enough to increase competition and keep prices in check.

“Switching looks set to remain low as people will still struggle to easily spot the cheapest deal on the market so the Government must go further and require all suppliers to use a single unit price.

“If the outcome for consumers has not improved by 2015, Which? wants the Government to reserve the right to take a further step and guarantee a fair price for people that are put on the default tariff.”

Shadow energy secretary Caroline Flint said the move was a step in the right direction but added that Ofgem’s proposals were only 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.”

RWE npower Group chief executive Paul Massara said: “Making it easier for consumers to engage with the energy market, helping them to understand their energy bills and to reduce energy use through energy efficiency is vital if families are to take control of their energy bills.”