Business Secretary tears into energy giants for milking vulnerable customers and pledges to end £2bn energy bill rip-off
Greg Clark said ministers are drawing up plans to go even further than the regulators to stop people from paying too much
BUSINESS Secretary Greg Clark today paved the way for a range of new price controls on Britain's Big Six energy giants by promising to stamp out a £2 billion power bills rip-off.
Vowing “we have a duty to act", the senior Tory confirmed Ministers were drawing up plans to go beyond proposals unveiled by regulators in August summer to fix Britain’s Big Six.
And he tore into the energy giants for milking their loyal elderly and vulnerable customers – claiming they are paying £300 a year more for their power because they’ve never switched.
Speaking at a Sun-backed fringe event at the Tory Conference, Mr Clark said: “We are troubled by what we hear. We intend to deal with this problem.”
It came as Tory backbencher John Penrose said companies such as British Gas were “failing the sniff test.”
The Competition and Markets Authority earlier this year said the lack of competition in the energy market was costing consumers nearly £2 billion a year. And they proposed a price cap for customers on prepayment meters.
But the Sun last month revealed ministers were considering going further and introducing a range of price controls to protect millions more families.
Consumer Minister Margot James is looking at proposals that would force the Big Six to contact customers who have never switched for a decade – telling them cheaper deals are available.
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And the Government is considering plans to slash the price hikes face by customers dumped on sky-high standard variable rates when cheap web-based one year deals come to an end.
Sarwijt Sambhi, head of UK Home Energy at British Gas-owner Centrica, warned that radical controls would hit investment and innovation.
But Mr Clark said the evidence for change was “indisputable”.
He said: “The CMA was very clear 70 per cent of the Big Six customers are on the high standard variable tariffs, including 45 per cent of the smallest businesses, they’re paying £300 a year more than others and they are more likely to be older and poorer than the people on the better deals.
He added: “There is an issue here that hangs over this sector and some others and it goes to the reputation that business has.
“It used to be the case that the best businesses had loyal customers and there was an understanding that it’s a valued relationship that would be rewarded.
“A troubling development is that the most loyal have been the people who have lost out from the better value deals that were available.
“We are troubled and intend to act to deal with this problem.
"The CMA suggested there was £2 billion-worth of detriment to ever customer that’s a big amount of money and we need to respond to that.
“We have a duty to act on it.”
Watchdog Which? warned the Big Six they were in “last chance saloon”.