Energy firms in tariff deal after Ofgem probe

DEPUTY Prime Minister Nick Clegg yesterday unveiled a new system under which energy companies will be forced to let customers know what their best deal is.

The move could save households up to £100 a year, according to ministers who have called for the change.

Energy companies will be obliged to tell people about the most economic tariff for them.

Clegg said seven out of 10 people have the wrong deal and pay too much.

Under the deal, the big six firms – British Gas, E.ON, NPower, Scottish and Southern, EDF and Scottish Power – will contact their customers once a year to tell them their best deal.

However George Godber, energy analyst at Matterley, accused the government of “bashing” the utility firms.

“Politicians love to bash energy companies, the simple truth is energy bills have risen mainly due to the UK’s huge commitment to uneconomic wind power. Bills are high and will continue to rise in the future, and it is not because energy firms are ripping them off.”

The change was announced by Clegg following a review into the sector by industry regulator Ofgem.

Meanwhile Clegg said that the Department of Energy and Climate Change would spend £190m a year to provide 270,000 fuel poor households in low-income areas with free loft and cavity wall insulation.

Christine McGourty from Energy UK, which represents energy companies, said: “There are many different ways people can manage their energy bills, whether by changing tariff, method of payment or installing energy saving measures such as insulation.”

But consumer groups welcomed the move to put the onus on energy companies to volunteer their most suitable deal. Consumer Focus’s director of energy Audrey Gallacher said: “This deal is long overdue... This needs to be part of a wider strategy to help people overcome the burden of having to navigate hundreds of complex tariffs.”