Davey: Cheaper UK energy tariffs on the way?

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Energy companies should discard their abundance of confusing tariffs in favour of a more customer friendly system Ed Davey is expected to announce today.

The energy secretary is expected to suggest that UK energy providers cut tariffs to a choice of four, and put customers on the cheapest one available.

Davey is expected to make the announcement at the energy select committee and is acting to distill the confusion made by Prime Minister, David Cameron, at prime ministers questions last month when he told MPs: "We will be legislating so that energy companies have to give the lowest tariff to their customers."

The Government considers the increasing energy bills as a significant political challenge, and this is seen as one way to attempt to appease the consumers that have seen many energy firms bump up their rates recently.

The "Bix Six" energy companies, all part of the Warm Home Discount Scheme, will be obliged by the Government to offer the cheapest tariffs to their customers - unless they refuse the offer.

The regulator Ofgem had already taken steps to challenge high bills before Mr Cameron's suggestions, but published their own proposals a few days after his comments.

They also made the suggestion that the energy companies should cut the number of tariffs down to four - with one a standard variable tariff and the others offering a more flexible figure for companies to adjust dependent on factors such as payment types and competitors pricing.

The regulator has already criticised the energy firms use of confusing marketing, suggesting that their customers potentially faced paying higher bills than they needed to.

They did not suggest that customers should automatically get put on the cheapest tariff available however.

Energy companies and consumer groups have reacted somewhat unfavourably to the suggestions as they fear it could actually lead to customers losing out on the cheapest tariffs if they are withdrawn, or even lead to competition between the energy firms being killed off.

Energy UK chief executive, Angela Knight, has warned that the Government's proposals could potentially see customers miss out on cheapest deals on offer - with firms possibly removing them entirely.

Taking to BBC Radio 4's Today programme she said: "If that is what the Government wants, that is fine. What it will do is potentially remove some choice away from people and certainly some deals that people get at the moment.

"Certainly it is the case that if you have restrictions and constraints, then you can't offer everything and you can't offer the variety of choice that you get at the moment."

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