Plans to make energy tariffs simpler are being urged by the government

The government is looking to push energy companies into providing cheaper tariffs for gas and electricity

16:22 20 November 2012

Following Prime Minister David Cameron’s comments in October, that there are hopes for legislation to be introduced regarding the current energy market, the government is aiming to make energy tariffs simpler.

 

Ministers are expected to set out plans on how they can push energy companies to provide customers with cheaper rates when it comes to paying for gas and electricity. This will mean that Energy Secretary Ed Davey will look to act on Mr. Cameron’s words.

 

The aim is for there to be fewer tariffs that are more suitable to customers, and the government is expected to look at ways to reduce the number of tariffs down to only four for gas, and four for electricity, according to reports.

 

It is understood that this is hoped to include a fixed-price for a fixed-term offer.

 

As a result it is hoped that energy companies will have to then shift customers to a lower more suitable tariff, with the exception being if the customer states they do not wish for this.

 

Some reactions to the new plans seem to highlight the fact that many options could be pushed out of the energy market, with some energy groups reportedly warning that the cheapest tariffs could go.

 

“The worry is that right now some of the cheapest deals in the market are only picked up by a few consumers,” said Audrey Gallacher, the Director of Energy at Consumer Focus, when speaking on Radio 4’s Today programme.

 

“There's a danger that those cheap deals will go and everybody else will find themselves on a tariff at the higher range of the current tariff mix.”

 

However, Tom Greatex, the Shadow Energy Minister, is for the proposed changes and he commented that “we need tariff simplification” in one BBC report.

 

The current energy market has been recently criticised and some people are calling for the need to reform it.

 

Ofgem, an Energy regulator, has reportedly been addressing pricing and their proposals are thought to include stopping complicated tariffs.

 

Charges can vary depending on different factors, including;

·         Payment method

·         If it is an internet-only tariff

·         Geographical location

·         Set details of a deal