Amber Rudd: Proposed default energy tariffs 'very interesting'

Temporary energy price caps could be introduced by the Government, Energy Secretary Amber Rudd has suggested.

Mr Rudd described proposed "default tariffs" which would be set by either regulator Ofgem or the Competition and Markets Authority (CMA) as "very interesting".

Under the plan, customers who have not actively chosen what energy tariff or supplier they use would receive prompts to look at switching supplier or tariff.

Customers who, in spite of the prompts provided, did not actively choose a new tariff at the end of their existing contract would be rolled on to either a domestic or a microbusiness default tariff at set maximum level.

The proposal was outlined in a CMA report in July which revealed British households are overpaying for their energy by around £1.2 billion a year.

Ms Rudd was replying to former shadow energy secretary Caroline Flint who said nearly three-quarters of customers on standard tariffs are being overcharged.

During energy questions in the Commons, Ms Flint said: "The Competition and Markets Authority interim report made clear that 70% of customers on their supplier's standard variable tariff are being overcharged and they recommended a better deal.

"So will you join with me in calling for the introduction of a protected or a default tariff, as it is known, to make the energy market more competitive and play a fair deal with the consumers that are being ripped off?"

Ms Rudd replied: "We are very, very interested in what they have proposed.

"It is just a report at the moment but the principle of a safety tariff is a very interesting way of approaching it. I do feel we need to take more action to support the vulnerable customers who are not making the switch and are missing out on those opportunities."

Earlier, Green Party MP Caroline Lucas told ministers to stop their "waffle" about helping people with their energy bills while they propose cutting subsidies to the solar industry and offer help to nuclear and fossil fuels.

Speaking in the Commons, Brighton Pavilion MP Ms Lucas asked Energy Minister Andrea Leadsom: "Can you explain how you can possibly think investor confidence will be enhanced by taking yet another wrecking ball to the British solar industry by the enormous subsidy cuts, alongside ending pre-accreditation?

"And on that latter issue, the Government's own consultation concedes that your department hasn't even bothered to estimate the likely impact on deployment, with tens of thousands of jobs at risk.

"Will you withdraw this now and stop all this waffle about consumer bills?

"If you were serious about consumer bills, your Government wouldn't be subsidising fossil fuels and nuclear to the extent that they are."

Tory frontbencher Ms Leadsom replied: "I'm afraid you haven't really done your homework. You should be aware that it's a requirement of EU state aid that we regularly review the subsidies to ensure that we're not over-compensating the sector.

"That's exactly what we're doing. We're now in a consultation, which closes on October 23.

"I'm sure you will be giving your response to that, and what we want to do, as I keep repeating, is to ensure that we are not impacting negatively on consumer bills but at the same time we're supporting this very valuable and growing sector to become subsidy-free within the next few years."