I’m supporting measures in Parliament to protect consumers from unfair energy bills, in the first step to reforming the broken energy market.
Following approval by the House of Commons, the Domestic Gas & Electricity (Tariff Cap) Bill now goes to the House of Lords. It’ll put in place a requirement on the independent regulator, Ofgem, to cap energy tariffs until 2020.
A temporary, absolute cap will be able to be set on standard variable tariffs (SVTs) and default tariffs, providing protection for the 11 million households in Great Britain who are currently on SVT or other default energy tariffs.
A Competition & Markets Authority investigation into the energy market found that domestic customers of the ‘Big 6’ energy suppliers pay on average £1.4 billion a year more than they would in a truly competitive market. This needs to be rectified and I welcome the Government’s action on the issue.
There’s effectively a two-tier market. Customers who shop around and switch suppliers can save approximately £300 each year. However, energy bills remain higher than they should for millions of households, and it’s of particular concern that these customers typically tend to be more vulnerable than those who are getting the best deals.
This legislation is not a ‘silver bullet’ to fix the dysfunctional energy market instantly, but a necessary precaution while a package of measures are put in place to increase competition and lower prices for consumers.
These include initiatives to engage consumers to find a better deal and speeding up the process of switching suppliers.
If the Lords don’t delay it and the Bill achieves Royal Assent by this summer then the price cap can be in place by next winter, providing price protection for millions of customers.
This is just one measure I’m backing to help working families in Crawley keep more of what they earn. More than 56,000 local residents have already benefited from increases in the tax-free Personal Allowance, and the amount earned before paying income tax rose further last month to £11,850.
Henry Smith MP