Davey spells out cheap power plan

ENERGY Secretary Ed Davey is to flesh out proposals to ensure all households are on the cheapest gas and electricity tariffs available.

After weeks of confusion about the Government's plans to simplify the market and reduce bills for hard-pressed families, the Liberal Democrat is expected to use an appearance before the Energy Select Committee to set out more detail.

It is thought that energy firms may be prevented from offering more than four tariffs and be required to automatically move customers on to the cheapest one.

The move comes amid long-standing concerns that many households are paying hundreds of pounds a year more than is necessary for gas and electricity because of the confusing array of different tariffs.

The issue has become more acute in recent years because of rising wholesale prices that have been passed on to customers.

Mr Davey's comments will be studied closely for any variation from David Cameron's commitments last month when he caught the Department for Energy and Climate Change off guard with a surprise announcement in the Commons.

The Prime Minister plunged energy policy into confusion by telling MPs that the Government would legislate so that gas and electricity companies "have to give the lowest tariff to their customers".

Mr Davey appeared to distance himself from the proposal and No 10 said energy firms would be obliged only to "offer" the cheapest tariffs.

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, including introducing legislation to make binding a previously announced system of voluntary arrangements.

The confusion led to criticism from business leaders who were both surprised by the announcement and opposed to an idea that could reduce competition in the market.

© Press Association 2012

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