John Baron MP welcomes government assurances over cheapest tariff information on energy bills

MP says energy suppliers must now accept recommendations of the Billing Stakeholder Group

 On the day EDF Energy announce that they are putting up gas prices by 15%, John Baron MP welcomed government assurances that it accepts recommendations made by the Billing Stakeholder Group [chaired by John] obliging energy companies to do more to help their customers. The assurances were given yesterday in the House of Commons during the passing of the Energy Bill. John chaired the Billing Stakeholder Group [BSG] at the invitation of the Government, and was tasked to make recommendations as to how best to achieve the Coalition Government’s commitment that energy suppliers provide better information about cheapest tariffs on bills.

 John has questioned the previous government and this coalition government about the need for energy companies to make it clearer on energy bills as to whether their customers are on that company’s cheapest standard tariff, assuming different payment options. John’s campaign has involved a Ten Minute Rule Bill, oral questions in the House and meetings with Ministers and others.

 John said:

 “The average energy bill has doubled since 2004. Research from Which? shows that for nine out of ten people the cost of energy is their top financial concern, especially for the five million households living in fuel poverty.”

 “The problem is that energy bills are too lengthy and too complex. 300 different tariffs understandably cause confusion. No wonder many people switch onto more expensive tariffs without realising. Cynicism is running high amongst customers.”

 “The Billing Stakeholder Group which I chaired has come up with three recommendations which will really help customers. I am pleased to say the Government has accepted and supports these recommendations. The energy suppliers must now respond positively, preferably on a voluntary basis, otherwise the Government will legislate where appropriate.”

The Billing Stakeholder Group chaired by John Baron MP consisted of Which?, Consumer Focus, Citizens Advice, Ofgem, Department of Energy and Climate Change officials and the Energy Retails Association [representing the energy suppliers].

• The three recommendations of the Billing Stakeholder Group are:
  • Energy suppliers will send out a generic signpost on bills in time for this winter [2011/12].
  • Energy suppliers will send out a letter to their customers [again in time for this winter] clearly detailing the extent to which customers are overpaying or underpaying compared to that supplier’s cheapest standard direct debit tariff.
  • If it is felt by the BSG and the Minister that Ofgem’s Retail Market Review recommendations published in December this year do not go far enough in helping customers, then the Minister and the BSG will instigate research whereby proposals will be market tested as to which is the most effective message to be printed on all energy bills. Energy suppliers will be expected to implement the findings of this research in time for winter 2012/13.
• As for the proposals to be market tested.
  • The Energy Retailers’ Association (ERA) propose a generic signpost message, to be displayed prominently on customers’ bills.
  • Further to John’s proposal to the Secretary of State in his letter of 18^th October 2010, Which? and John propose a more tailored message, which would quote £s saved if that customer was on their energy supplier’s cheapest standard tariff depending upon payment method, as influenced by the customer’s actual usage over the 12-month period where appropriate.
• Fuel poverty is defined as more than 10% of income being spent on maintaining an adequate level of heating.
• For further information, please refer to the press release ‘John Baron MP presses Secretary of State over cheapest tariff information on energy bills’ [11^th May 2011].