Britain seeks to cap 'rip-off' energy prices

Britain on Monday launched plans for a cap on domestic energy prices, as it cracks down on poor-value tariffs that hurt the most vulnerable.

The government is to present legislation before parliament to limit unit prices charged for electricity and gas, in time for next winter, for customers not yet protected who end up with the highest tariffs.

Britain's privatised domestic energy sector, which is run in large part by eurozone-based companies, has faced criticism over default high tariffs that punish customers who for various reasons do not seek out a better deal by switching provider.

"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, who leads the right-wing Conservative Party.

"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."

The Domestic Gas and Electricity (Tariff Cap) Bill will allow regulator Ofgem to limit tariffs until 2020, with the option to extend the cap annually until 2023.

The strategy will guarantee price protection for 11 million households currently on the highest tariffs in Britain.

In 2016, the Competition and Markets Authority warned that British consumers were paying £1.4 billion ($2.0 billion, 1.6 billion euros) too much per year on companies' default tariffs.


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© 2018 AFP

Citation: Britain seeks to cap 'rip-off' energy prices (2018, February 26) retrieved 22 January 2020 from https://phys.org/news/2018-02-britain-cap-rip-off-energy-prices.html
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