Energy Bill must strike the right balance

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My colleagues in the Department for Energy and Climate Change (DECC) have made clear their intention to ensure that we all get a better deal on our energy bills and that each and every one of us should be on the cheapest possible tariff.

DECC has launched a consultation which is open until January 4 so that interested parties can have their say on a number of proposals, all of which are focused on reducing households bills. The results of the consultation will be fed into the forthcoming Energy Bill.

At the moment, we’re faced with hundreds of tariffs which are, frankly, bewildering. It’s hard enough to work your way around the options and the small-print when you have the internet. It’s even harder if you don’t or if you feel totally overwhelmed and are unable to look at alternatives.

We’re aware that we need to strike a balance with helping some consumers and allowing others to look for better deals and also maintaining the incentive for energy suppliers to be competitive and innovative.

Future changes that are being consulted on will include:

Limiting suppliers to four ‘core tariffs’ per fuel – putting an end to the seemingly endless generation of new price plans

Requiring that those four tariffs include one standard variable rate tariff and one fixed term, fixed priced tariff – making them clear, simple and easily compared – after all, they account for 85 per cent of all customers

Allowing suppliers the freedom to offer the remaining tariffs as they wish, including, for example, green tariffs

Prohibiting poor value ‘dead’ tariffs – ensuring that no customers are left languishing on redundant price plans.

Requiring suppliers to offer just a single price for their four tariff types – this would not prevent discounting for dual fuel or lower cost payment methods.

We want all customers to be on the cheapest price plan available as soon as possible and by summer 2014, at the latest.

Not quite so headline-grabbing are proposals to require suppliers to provide clearer information to help consumers switch tariffs and to establish a co-ordinated network of voluntary organisations and community groups to help vulnerable households get a better energy deal.

It’s great that we can help everyone save money but it’s the vulnerable people – the ones I meet at surgery appointments, on home visits and on other occasions, which reinforce how important these changes are: for many of us, we just don’t have the time or inclination to seek out the best possible deal but for some, it really is an impossible minefield and it’s those people that these proposals will help the most.