Energy Prices: Companies Must Give Customers 'Best Deal' Nick Clegg Says

Posted: Updated:
Energy companies will write to customers every year telling them the best deal for their household in a move which could save millions £100 per year
Energy companies will write to customers every year telling them the best deal for their household in a move which could save millions £100 per year

Energy companies will write to customers every year telling them the best deal for their household in a move which could save millions of people up to £100 per year, Nick Clegg will announce today.

Customers could save cash by switching their tariff, but 70% of households pay more than they need because they are not on the best rate.

The deputy prime minister hopes a new agreement with Britain's six biggest energy firms will offer customers the most efficient deal, driving down gas and electricity bills.

In a speech, Clegg will say ministers "cannot control volatile world energy prices", but will claim the government can help people cut their bills.

He is expected to say: "We have secured a landmark deal with the six big energy companies who cover 99% of customers, to give customers a guaranteed offer of the best tariff for them.

"Right now, seven out of 10 customers are on the wrong tariff for their needs, so are paying too much.

"Yet people rarely switch, despite the fact some families could save up to £100 a year.

"There are currently over 120 different tariffs, making it very difficult to know where to start. That is going to change.

"As of this autumn, your supplier will have to contact you with the best tariff for your needs - and if you call them, they'll have to offer you the best deal too."

Energy­helpline.com's Mark Todd said: “There is pressure from all sides on people’s energy bills.

“It seems there is no let-up for the consumer. We’ve got raw material cost increases, green taxes for insulation and building wind farms. And now investment in infrastructure, which everyone says is falling to pieces.”

He is also expected to announce a new scheme where companies will print barcodes on bills, allowing customers to scan the code on their mobile phones, linking them to the best energy tariffs.

Clegg will also use his speech at KPMG in London's Canary Wharf to defend plans to "green" Britain's economy despite many households struggling with rising shopping and fuel prices.

"We are undergoing a profound transformation within our economy and for the first time ever our economic and environmental mantras are exactly the same: waste not, want not," the Liberal Democrat leader will say.

"Responsibility, sustainability are the watchwords of the day, and that creates a unique opportunity to put environmental thrift into the mainstream."

Jim Footner, head of Greenpeace's climate and energy campaign, said: "Tackling soaring energy bills will doubtless be good news to thousands of households who are struggling to make ends meet.

"So it's good to see Nick Clegg taking an interest in the plight of people who are feeling the pinch.

"But tinkering around the fringes of the overly gas-dependent energy sector simply won't be enough.

"If Clegg wants the Lib Dems to be seen as a green champion, and a friend of the bill-payer, then he's got to take on the Big Six energy companies by reforming the industry.

"He's got to make sure that we become far less reliant on expensive, imported gas while also backing cutting-edge, home-grown renewable energy."

Consumer Focus's director of energy Audrey Gallacher said alerting customers to the best deal was "long overdue".

But she added: "While any move to help energy customers to get the best deal is welcome, it has to be the right method to reach people and the benefit must outweigh the cost.

"This needs to be more than a one-off mail shot and part of a wider strategy to help people overcome the burden of having to navigate hundreds of complex tariffs to get a decent price.

"Unfortunately, people don't trust energy firms and previous mail-outs have not always had the best take-up."

Richard Lloyd, executive director of consumer group Which?, said: "Most people find it much too complicated to work out how much they should be paying for gas and electricity so these moves to make it easier to find a cheaper deal are an important step forward at a time when so many are struggling to pay their bills."

A spokesman for industry regulator Ofgem welcomed today's announcement, saying: "Our retail market review showed the energy market is too complex and that further action is needed to make sure the market works in the interests of consumers.

"Since we have published this analysis many suppliers have admitted they need to change their ways and some are beginning to try and address the problems Ofgem's review identified."

Shadow energy secretary Caroline Flint criticised the time taken for the coalition to tackle energy bills and accused the Government of being "completely clueless" in helping struggling households.

She said: "Our energy market needs a complete overhaul, but this Government is only fiddling at the margins.

"Labour will stand up for hard-pressed families and pensioners and end the rip-off.

"We will break the stranglehold of the big six energy companies by making them sell all of their energy into a pool, encouraging new entrants, increasing competition and driving down energy bills for families."

She said Labour, which was in power for 13 years from 1997 to 2010, would force energy firms to guarantee customers aged over 75 would automatically be offered the cheapest gas and electricity tariffs.

Around the Web

Nick Clegg | Politics | The Guardian

Nick Clegg | Facebook

Nick Clegg - | Spokesperson Detail

Nick Clegg - Deputy Prime Minister - Telegraph

Nick Clegg disputes PM's claim over web snooping plan

Nick Clegg secures energy bill saving deal

Nick Clegg denies David Cameron claim he endorsed email surveillance

Theresa May fights back over Abu Qatada, human rights and Nick Clegg