By Daniel Hunter
Millions of people, who may be paying more than they need to, could have their energy bills cut thanks to a landmark deal for consumers agreed between the Coalition Government and all the major energy suppliers, Deputy Prime Minister Nick Clegg will announce today (Wednesday).
The commitments secured by the Coalition Government will mean that the big six energy companies — EDF, E.On, British Gas, Southern, Scottish Power and NPower, who supply 99 per cent of British homes with energy - will now write to customers every year to specifically tell them what the best tariff is for them and how to get it. Some vulnerable customers — those assisted by the Warm Home Discount scheme - will be contacted twice a year.
Customers will also be offered the best tariff if their contract comes to an end and if they contact their supplier at any time to ask.
There are more than 120 different tariffs. Currently, seven out of 10 people aren’t on the best tariff for them. The average customer tends to stay on theirs for years, despite the amount of energy they use varying over time. In 2010, 75 per cent of people did not change their tariff.
The Government wants people to save money on their bills whilst also becoming more switched on to the idea of saving energy through green measures to make further savings and protecting the environment.
At a speech at ‘Canary Wharf’s greenest building’, the KPMG headquarters, Deputy Prime Minister Nick Clegg is expected to say:
"We need to get bills as low as possible. I know that many families are struggling with rising energy bills. We can't control volatile world energy prices. But we can still help people get their bills down.
“So I can announce today that we have secured a landmark deal with the six big energy companies who cover 99 per cent of customers, to give customers a guaranteed offer of the best tariff for them.
“Right now, seven out of 10 customers are on the wrong tariff for their needs, so are paying too much. Yet people rarely switch, despite the fact some families could save up to £100 a year. There are currently over 120 different tariffs, making it very difficult to know where to start.
“That is going to change. As of this Autumn, your supplier will have to contact you with the best tariff for your needs. And if you call them, they’ll have to offer you the best deal too.
“We’re also working with energy companies to put special barcodes on energy bills. You’ll be able to scan them with your smartphone to get quotes and switch tariff or supplier in a matter of minutes.
“Plus we’re working with consumer groups to make it easier for people to club together and switch supplier. Consumers will be able to use their collective purchasing power to bring down bills.
“We want to see consumers saving money and engage with the energy they use. Precisely the kind of thrift that is good for pockets as well as the planet.”
Bills can be further reduced with energy efficiency measures such as installing loft and cavity wall insulation — which the Government requires the big energy suppliers to help households with and provide free to some of the most vulnerable consumers.
The best tariff offer is part of a package for consumers agreed between Government and the major energy suppliers which also includes:
Investigating putting barcodes on bills which, when scanned by a smartphone, will allow customers to find quotes and online switching.
Big Energy Week 2. Energy companies will provide support for a second Big Energy Week coordinated by Citizens Advice.
Outreach events in communities will connect consumers, particularly the vulnerable, with sources of help with their bills. This will build on the success of the first Big Energy Week in January this year.
The companies also confirmed their commitment to simplifying their tariffs and supporting collective switching, where customers switch together as a group to get the best deal.
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