John Baron MP presses Secretary of State over cheapest tariff information on energy bills

MP’s simple proposals have Ministerial support

Late yesterday afternoon John Baron MP pressed The Rt. Hon. Chris Huhne MP, the Secretary of State for Energy and Climate Change, over whether he will support John’s proposals to help customers ensure they are on their energy company’s cheapest standard tariff. Since raising this issue in the House of Commons last year, John has had a series of meetings with Ministers, Which? Magazine, and the Energy Retail Association (ERA) as well as the Department’s civil servants.

John asked:

“ The Government are rightly concerned about fuel poverty and whether customers are paying too much for their energy—a situation not helped by a myriad of tariffs and complex energy bills.”

“ I have submitted simple proposals to his Department that would oblige energy companies to show customers how much they would save if they were on that company’s cheapest standard tariff, based on the customer’s actual usage, rather than a generic or average usage. Other Ministers have been supportive. Will he be? ”

The Secretary of State responded by saying that both he and his whole Ministerial team are supportive of John’s work and the ideas that he has brought forward.

John said afterward:

“ I am pleased that I have the Secretary of State’s support on this issue. Too many people live in fuel poverty and pay too much for their energy. By forcing energy companies to clearly show how much their customers would save by being on the cheapest standard tariff and taking into account different payment methods can only help customers not to waste money. In many cases the figure will be zero, but in many others it will not.”

Notes

• Fuel poverty is defined as more than 10% of income being spent on maintaining an adequate level of heating. It is estimated 4 million people in the UK live in fuel poverty.

• John suggested four simple statements which would refer to the customer’s energy usage and take account of such factors as access to the internet and banking services in order to help the largest possible number of customers. The statements should read:-

“ This is how much you would have saved if you were on our cheapest standard tariff assuming:

1. You had online access and were paying by direct debit – £ saved
2. You had online access only – £ saved
3. You had no online access but were paying by direct debit – £ saved
4. You had no online access and were not paying by direct debit – £ saved ”

• The focus on the ‘cheapest standard tariff’ would serve to eliminate the many limited offers that companies promote and which are hard to accommodate for. However, this tariff should be in existence for a minimum of 12 weeks in order to ensure the price remains fixed for long enough to allow people time to switch – something Which? call a ‘Time Guarantee’.

• There are hundreds of different tariffs in existence and this can cause considerable confusion – evidence suggesting that a third of those customers who do switch, switch on to a more expensive tariff.