Government 'must act urgently' on energy price cap - MPs
2 min read
Ministers must "urgently" bring in a cap on energy bills to fix the "broken" utilities market, an influential group of MPs has said.
The Business, Energy and Industrial Strategy Committee's latest report says the so-called Big Six energy companies have been consistently overcharging customers on certain tariffs.
The MPs found that companies were targeting their cheap tariffs on customers likely to switch, while "sticky" customers who rarely change suppliers are left on expensive variable tariffs.
Efforts from companies to change their practices have so far been "feeble", the report adds.
The committee also backed the Government's plans for an absolute, rather than a relative price cap as "the most effective measure" to reduce bills.
And they controversially suggest that companies should not be able to appeal to the Competition and Markets Authority, arguing that "this could unnecessarily delay the successful implementation of the cap".
Committee chair Rachel Reeves said: "The energy market is broken. Energy is an essential good and yet millions of customers are ripped off for staying loyal to their energy provider.
"An energy price cap is now necessary and the Government must act urgently to ensure it is in place to protect customers next winter.
"The Big Six energy companies might whine and wail about the introduction of a price cap but they’ve been overcharging their customers on default and SVTs for years and their recent feeble efforts to move consumers off these tariffs has only served to highlight the need for this intervention."
SSE has responded saying, "We believe competition is better than caps, but if there is to be a cap it will be critical to avoid repeating the mistakes of the existing cap; to avoid unintended consequences, a new cap-setting methodology is needed which reflects the true cost of providing energy to all customers, based on a realistic view of what constitutes an efficient but also sustainable business model."
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