Energy Tariffs

It is important to ensure that consumers have all the information they need to make an informed decision about their energy tariffs. There used to be far too many tariff options which caused much confusion – as evidenced by the fact that many who changed energy provider switched on to a more expensive tariff. 

I campaigned in Parliament for the government and Ofgem to oblige all energy companies to provide cheapest tariff information on quarterly bills – specifically, what the cheapest tariff offered by that company is, and how the customer can switch if they are not already on it. This campaign was supported by Which?

Obliging energy companies to print cheapest tariff information on all energy bills ensures that consumers are paying no more than they need to for their energy. This helps all households, but particularly the 4 million people who live in fuel poverty - this being defined as more than 10% of income being spent on maintaining an adequate level of heating.

This proposal was included in the 2010 Conservative election manifesto, and subsequently in the coalition document. As a result of pressing the Secretary of State for Energy and Climate Change, I was invited to chair a Billing Stakeholder Group (BSG) which included Ofgem, officials from the Department for Energy and Climate Change, the Energy Retailer’s Association and consumer groups.

The BSG put forward three recommendations which the Minister of State agreed to during the passing of the Energy Act in September 2011, following my tabling of New Clause 19.

In October 2012, Ofgem published its Retail Market Review of the energy sector. Contained within was the main recommendation of the BSG that quarterly bills should prominently display how much individuals could save, tailored to their usage, were they to switch to their supplier’s cheapest standard direct debit tariff.

The final draft was published in 2013, and the Government incorporated many of the Retail Market Review proposals – including my recommendation – into the following legislation, as did Ofgem in their licence conditions. These reforms have made it easier for consumers to switch to cheaper tariffs and save money on their energy bills.