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During Prime Ministers questions yesterday, David Cameron announced new legislation to force energy firms to give their customers their cheapest tariff yesterday.
No further details were forthcoming from the PM so we'll have to wait until the forthcoming Energy Bill for more information about how the system might work.
The announcement has received a mixed reception. Ann Robinson of uSwitch.com said:
"This has to be a mistake – the unintended consequences would be to kill competition. Consumers will be left with Hobson's choice – there will be no spur, no choice, no innovation and no reason for consumers to engage any more.”
Stephen Fitzpatrik from Ovo Energy welcomed the news and speaking on Radio 4′s Today programme said the announcement was "great news” for consumers and would help break the "stranglehold” of the big six energy companies.
Neil Bentley, director-general of the CBI was less keen on the increasingly politicised debate over the UK's energy supplies and was concerned this could scare off potential investors in the power sector. The CBI is asking the government for "less politics, more policy” to encourage growth.
Whatever happens, don't expect any changes soon though. The Energy Bill has to be finalised (or possibly completely rewritten after yesterday's announcement!), get passed in parliament and energy companies will need time to become compliant.
Perhaps of more immediate relevance was Mr Cameron's initial response to the question raised by Labour MP Chris Williamson asking how his commitment to take action to help people reduce their energy bills was going. Mr Cameron replied:
"Well, we've encouraged people to switch which is one of the best ways to get your energy bills down.”
We couldn't agree more, though according to Reuters only 15% of households actually do switch energy suppliers in search of better rates. In a way, those 15% are cherry picking the best rates and being subsidised by the other 85%. Make sure you're one of them by using the MoneyMaxim energy comparison site.
Switching your supplier is one thing, but then you also have to make a note in the diary to review it at the end of the deal. Or even part way through, even with exit fees, you'd want to be on the best rate wouldn't you? Sounds like too much effort? Not when we do it for you it isn't. Sign up to our free Energy Monitor service, give us your usage figures and current tariff and we'll do the rest and contact you when you need to change or an opportunity has arisen.