Energy bills fiasco turns up heat on coalition
David Cameron insisted last night he will change the law to ensure struggling West families pay lower energy bills.
But the Prime Minister was unable to give full details of his plan to ensure the energy giants always give customers the cheapest possible deal.
The move would be welcomed across the West as winter approaches, because fuel bills have been soaring far above inflation.
The hundreds of thousands of older people in the region would benefit particularly, as they spend a much bigger proportion of their incomes on heating their homes.
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The Office for National Statistics has found the South West has the highest proportion of people aged 50 or over in England, at 39 per cent, compared with just 26 in London.
Mr Cameron made a surprise announcement at Prime Minister’s Questions on Wednesday that he would legislate so gas and electricity firms “have to give the lowest tariff to their customers”.
At the moment there is a bewildering number of different tariffs, including ones that penalise customers who do not pay by direct debit.
Since privatisation, governments have said the ability to switch suppliers is the best way to encourage competition and keep prices low, but in reality few people take that option. So the PM’s pledge was widely welcomed – but appeared to throw his own Energy Ministers into confusion.
Last night, Downing Street promised the Government would change the law, while ensuring that customer choice was preserved. One option would be for customers on a variable tariff paying by direct debit to be switched automatically to the lowest rate by their provider, with the ability to opt out if they wish.
Mr Cameron, arriving in Brussels for an EU summit, said he was on the side of hard-pressed people “who struggle to pay energy bills.
“That’s what I said in the House of Commons yesterday. We are going to use the forthcoming legislation, the Energy Bill coming up this year, so we make sure, we ensure, that customers get the lowest tariffs.”
The PM did not warn energy firms or the Energy Department about his announcement, and Energy Secretary Ed Davey distanced himself yesterday.
He referred to moves previously announced by Deputy Prime Minister Nick Clegg to require energy firms to tell customers about the lowest tariffs available – a much weaker policy.
Energy Minister John Hayes, hauled before the Commons to face an urgent question on the matter, said there were “a number of options” being considered and voluntary arrangements announced by Mr Clegg in April would be “evaluated to see if we should make the legislation binding”.
He added: “We will use the Energy Bill to get people lower tariffs and of course there are different options to be considered in the process.”
Asked whether he knew about Mr Cameron’s announcement in advance, he said: “Does he give me notice of every answer? Does he get notice of every question? Of course the answer is no.”
Labour claimed the Government was defending a policy it had no intention of implementing and compared the situation to The Thick of It, the BBC’s satirical comedy of Whitehall mores.
Shadow Energy Secretary Caroline Flint said: “It’s another week, another shambles from an out-of-touch Prime Minister who makes it up as he goes along.”
The policy had “completely unravelled” in just 24 hours, she claimed, adding “it left his own ministers at a loss as to what energy policy actually is.”
“Families struggling with soaring energy bills and facing more prices rises this winter deserve better than this shambolic Government and clueless Prime Minister.”
Neil Bentley of the business lobby group the CBI said the PM’s statement had surprised the industry and was at odds with competition in the market.
The Federation of Small Business warned the plan could lead to price-fixing, but consumer group Which? urged the PM to “stick to his promise”.
Greenpeace scoffed: “The Government’s energy policy is now as confusing as British gas tariffs.”
A Downing Street spokeswoman declined to say if the Department for Energy and Climate Change had been informed in advance.