Energy firms to guarantee 'best deals'

Hard-pressed families stand to save up to £100 a year under a “long overdue” agreement to ensure the UK's biggest energy suppliers are offering customers the best deal.

The "big six" utility companies have agreed with the Government to write to customers at least once a year to help them identify the best tariff available from within that firm and how to switch.

Some 70% of households pay more than they need to because they are not on the best rate, while there are 120 tariffs from which to choose.

Energy providers - such as British Gas, Npower and EDF - have come under pressure to curb price rises and to improve transparency as household incomes are squeezed by high inflation and low wage growth.

Consumer groups broadly welcomed the move but said more was needed to ensure customers were receiving the best deals and prices did not shoot upwards.

Audrey Gallacher, director of energy at Consumer Focus, said: "While any move to help energy customers to get the best deal is welcome, it has to be the right method to reach people and the benefit must outweigh the cost.

"This needs to be more than a one-off mail shot and part of a wider strategy to help people overcome the burden of having to navigate hundreds of complex tariffs to get a decent price. Unfortunately, people don't trust energy firms and previous mail-outs have not always had the best take-up."

Unveiling the agreement, Deputy Prime Minister Nick Clegg said: "These are the kinds of changes that help people save money, that get us thinking about the energy we use, that promote the kind of thrift that is good for pockets as well as the planet."

The agreement will also see companies printing barcodes on bills, allowing customers to scan the code on their mobile phones, linking them to the best energy tariffs.

Energy watchdog Ofgem last year accused firms of failing "to play it straight" with consumers as it unveiled a proposed shake-up of the industry.

The regulator hit out the number of different tariffs available and called on firms to narrow the range of standard tariffs on offer.

A spokesman for Ofgem welcomed today's announcement, saying: "Our retail market review showed the energy market is too complex and that further action is needed to make sure the market works in the interests of consumers.

"Since we have published this analysis many suppliers have admitted they need to change their ways and some are beginning to try and address the problems Ofgem's review identified."

Jim Footner, head of Greenpeace's climate and energy campaign, said: "Tackling soaring energy bills will doubtless be good news to thousands of households who are struggling to make ends meet."

He added: "But tinkering around the fringes of the overly gas-dependent energy sector simply won't be enough.

"If Clegg wants the Lib Dems to be seen as a green champion, and a friend of the bill-payer, then he's got to take on the Big Six energy companies by reforming the industry.

"He's got to make sure that we become far less reliant on expensive, imported gas while also backing cutting-edge, home-grown renewable energy."

Shadow energy secretary Caroline Flint criticised the time taken for the coalition to tackle energy bills and accused the Government of being "completely clueless" in helping struggling households.

PA