THE BLOG
04/03/2015 03:35 GMT | Updated 03/05/2015 06:59 BST

Energy Firms Are Overcharging Three in Four Households - And the Government Is Letting Them Get Away With It

More than two years ago David Cameron promised, at Prime Minister's Questions, to require the energy companies, by law, to put all customers on the cheapest tariff. Quite an undertaking, you might think.

Given he reiterated this promise no fewer than 16 further times in the House of Commons you might reasonably expect that, by now, customers would actually be on their supplier's cheapest tariff. He's had plenty of time to sort it out, after all.

Yet research I've published today has revealed that despite those 17 solemn promises, 75% of households are still not on their supplier's cheapest tariff. Or, to put it another way, three out of four households are being routinely overcharged by their energy supplier. And not just by a little bit, they're being overcharged a lot. The average family is paying a whopping £180 a year more than their supplier's cheapest tariff would cost them.

In some cases, the difference is as much as £250. Now, energy bills aren't cheap for anyone. In fact, they're £300 a year higher compared to the last election and the number of families with children who can't afford to heat their homes is at an all-time high. But the government is letting the energy companies get away with this overcharging.

Maybe you're thinking there's a reason why there's a difference in price between the various tariffs. There isn't really. At least, there's no good reason why energy companies are charging some people £250 a year more than their neighbours, even when they use an identical amount of energy.

The figures I've published today factor in all the possible reasons that might explain some of the differences. All the estimates are based on the same amount of electricity and gas being used. All of them are based on people paying by direct debit. And, fundamentally, however you buy it and whoever you buy it from, it's the same electricity and gas flowing through the pipes.

What's really happening here is energy companies are taking advantage of the fact that a lot of people are so fed up with the energy companies, so sick of being ripped off and mis-sold, so tired of seeing their bills rise year after year, that they've switched off from the energy market. So what suppliers are doing is targeting their lowest prices at a small number of customers, while sustaining significantly higher prices for everyone else. It's just not fair. More than that, it tells us that competition in the energy market isn't working - because competition isn't simply about winning new customers, it's also about retaining your existing customers. Other industries have all kinds of schemes to reward their customers. But in the energy market the only reward for loyalty is a kick in the teeth.

The Tories have shown that they're not prepared to stand up for consumers. Only Labour will do that. If we win the election, Labour will freeze energy prices until 2017, so that bills can fall but not rise, give the regulator the power to force energy suppliers to cut their prices and end overcharging once and for all.

Caroline Flint MP is Labour's Shadow Energy and Climate Change Secretary