Ministers lay out plans for price cap 'rip off' energy bills

Ministers lay out plans for price cap 'rip off' energy bills

"I have been clear that our broken energy market has to change - it has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much", said May.

The Competition and Markets Authority found that customers of the Big Six energy suppliers on default energy rates were paying £1.4bn a year more than they needed to.

Prime Minister Theresa May first proposed a price cap on the energy sector earlier this year, the biggest market intervention since its privatisation nearly 30 years ago.

To help with this, Ofgem is introducing new rules today to allow suppliers to roll customers coming to the end of their contracts onto another fixed deal instead of a poor value standard variable tariff.

The regulator said it will work on extending price protection to at least 2m more vulnerable households for winter next year, once the timing of the government's price cap is put in place.

The Prime Minister bowed to mounting pressure over the cost of gas and electricity bills and announced an energy cap during her disastrous conference speech in Manchester last week.

Ofgem, the energy regulator, has already capped bills for those on pre-payment meters and yesterday announced that it will extend the cap to 1million more vulnerable households this Winter. According to the Government, this would protect around two-thirds of households.

Today Ofgem said it will work with the Government on these plans to make sure those on SVTs and default deals are protected.

Greg Clark, the Business and Energy Secretary, said: "The energy market is broken".

"That is simply wrong".

Chi Onwurah, the party's shadow minister for industrial strategy, science and innovation, told Sky News: "The test of an energy price cap will be how many customers benefit by how much this winter".

The Government said it had taken the step because the energy market "does not operate in the interests of the majority of consumers", adding: "While we are in favour of free markets, we will always take action to fix them when they're broken".

The cap is seen as a way to appeal to those voters who, after seven years of austerity, are questioning the ruling Conservative Party's centre-right ethos.

"As it will take some time to come into effect, customers sitting on expensive standard variable tariffs should switch now".

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