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Plans for price caps on default energy tariffs will go before Parliament today for the first time.
Domestic Gas and Electricity (Tariff Cap) Bill are hoping to allow regulator, Ofgem, to cap prices until 2020, which could save consumers up to £100 a year.
“It’s often older people or those on low incomes who are stuck on rip-off energy tariffs, so today we are introducing legislation to force energy companies to change their ways,” said prime minister Theresa May.
“Our energy price cap will cut bills for millions of families. This is another step we are taking to help people make ends meet as we build a country that works for everyone.”
Members of the “big six” energy firms, including British Gas have not been on board with the proposed caps, saying they will decrease competition in the market.
Centrica (LON: CNA), the owner of British Gas, said last week that the proposed price caps was partly why the group had made the decision to axe 4,000 jobs by 2020.
Caps on energy prices were first raised by former Labour leader, Ed Milliband, though these were criticised by the Conservatives at the time. May has followed on with these plans after she promised to crack down on “rip-off” bills in her keynote speech at the Conservative party conference.
“Today’s action, whilst welcome, will do little to comfort customers facing price hikes now after the Government delayed this bill by over a year,” said Rebecca Long Bailey, the shadow business secretary.
“The Government promised action on energy bills a year ago yet energy costs are still spiralling and four million households live in fuel poverty.
“A price cap is simply a temporary sticking plaster and the Government must realise that they need to do much more to fix our broken energy market.”