I
do share concerns over increase in prices. Suppliers are protected from
recent fluctuations in the price of wholesale energy as they buy their energy
up to two years in advance, and prices remain significantly lower than in 2015.
I therefore expect energy companies to treat their customers fairly.
As
you are aware, the Government made a proposal to extend the price protection
currently in place for some vulnerable energy consumers to more of those on the
poorest value tariffs. Rest assured, the Government is committed to doing so
and the Energy watchdog Ofgem has accepted the call for further action.
More
specifically, the Business and Energy Secretary, Greg Clark, has written to
Ofgem asking what action the regulator intends to take to safeguard customers.
Ofgem has committed to taking prompt action, in consultation with consumer
experts, to develop proposals including a safeguard tariff. The Government
wants to see rapid progress on this commitment and has not ruled out taking
further action if necessary.
There
is already a prepayment price cap in place protecting households least able to
benefit from competition. On 1 April 2017 a prepayment price cap came into
force protecting over four million households using pre-payment meters. The
temporary cap, which will remain in place until the end of 2020, is expected to
reduce bills across Britain and will save the average household £80 a year.
Ultimately,
Government policy costs make up a relatively small proportion of household
energy bills and they cannot by themselves explain price rises announced by
energy suppliers. Indeed, a recent report from the independent Committee on
Climate Change shows that policies driving energy efficiency improvements have
offset the cost of energy policies and have, on average, resulted in lower
energy bills for households.
