Energy Bills: Cameron Promises New Laws

Energy firms will be forced to give customers the cheapest available tariff under new laws, David Cameron has announced.

Amid mounting concern about the soaring cost of power, the Prime Minister vowed to legislate to tackle the often-confusing array of prices.

"I can announce that we will be legislating so that energy companies have to give the lowest tariff to their customers," he told MPs during Prime Minister's Questions.

His intervention follows a string of above-inflation price hikes by major energy companies in recent days.

Ministers have previously encouraged customers to shop around to make sure they have the best deal.

They have also announced moves to require energy companies to inform their customers if they could be on cheaper tariffs.

But the forthcoming Energy Bill will go further by introducing a requirement for companies to give people the best tariff for their circumstances.

The announcement came after consumer body Which? called for an urgent independent review into the rising cost of household energy bills.

In a letter to the Prime Minister, Which? executive director Richard Lloyd said the energy market was "broken".

A review was needed to look at rising prices and whether competition between suppliers could be made to work more effectively to help consumers, he insisted.

With the average bill up 13% since a Government energy summit a year ago, "it is no wonder consumers tell us that energy prices are one of their top financial concerns," he said.

He claimed there was little evidence that the Government was living up to its promise to make energy companies more competitive, with 75% of consumers on the most expensive tariff, and the numbers switching suppliers continuing to decline.

Mr Lloyd said people were questioning whether they were being fairly charged for gas and electricity, as companies blamed wholesale price rises and the cost of implementing environmental and social policies for bill increases.

He added: "The time for action is now. Warm words alone are not enough to keep consumers from the cold this winter."

A spokesman for the Department of Energy and Climate Change said: "Households facing rising energy bills this winter aren't going to be helped by more inquiries or investigations that could take years to complete and implement.

"We know what the problems are, we want to get on with tackling them now. We're focusing on action, not more words.

"The fact is reforms by Government and Ofgem, including electricity market reform through the forthcoming Energy Bill and Ofgem's ongoing Retail Market Review, offer the quickest way to boost consumer confidence in the energy market."

Shadow energy secretary Caroline Flint said: "Which? are right to say that Britain's energy market is not working in the public interest.

"For too long energy companies have been able to get away with blaming wholesale prices when bills go up, but failing to pass on savings when wholesale prices fall."