The ‘Big Six’, the country’s six largest energy suppliers, will be made to tell their customers which tariffs are the lowest after the Government managed to secure what is set to be a landmark deal.
Appearing on BBC Radio Five Live, the Deputy Prime Minster Nick Clegg took the opportunity to explain the Government’s plans. The specifics of the deal and how it will be implemented have yet to be revealed, but under the scheme energy firms will have to inform consumers on an annual basis about the lowest available tariffs.
Commenting on the deal yesterday, Nick Clegg said: “We need to get bills as low as possible. I know that many families are struggling with rising energy bills. We can’t control volatile world energy prices. But we can still help people get their bills down.
“So I can announce today that we have secured a landmark deal with the six big energy companies who cover 99 per cent of customers, to give customers a guaranteed offer of the best tariff for them.”
Around 70% of energy consumers on the wrong tariffs, meaning they are paying more than they need to. However, the majority of people still fail to switch to a more suitable tariff or move supplier, even though for some households it could cut their energy bills by as much as £100 a year.
From this Autumn, energy providers will have to contact their customers to offer them the best possible tariff to meet their needs. The same will apply when customers contact their supplier directly.
“We’re also working with energy companies to put special barcodes on energy bills. You’ll be able to scan them with your smartphone to get quotes and switch tariff or supplier in a matter of minutes,” said the Deputy Prime Minister.
“Plus we’re working with consumer groups to make it easier for people to club together and switch supplier. Consumers will be able to use their collective purchasing power to bring down bills,” he added.
For customers, when their contracts are due for renewal, energy firms will have to contact them in writing to advise them of how they can switch to a better deal. Pensioners and other vulnerable consumers who are susceptible to high electricity and heating costs will be contacted every six months.
On the whole Clegg’s announcement has been received warmly but the general consensus seems to be that these latest measures, however positive, are still not enough. With a recent report revealing that a shocking one in four energy bills are incorrect, the energy industry – and particularly the ‘Big Six’ – Audrey Gallagher, director of energy at Consumer Focus, emphasised how vital it was for the Government to do more when it comes to helping consumers tackle escalating energy costs.
Paul Steedman from Friends of the Earth said the Government was simply “papering over the cracks”.