Cameron gets drawn into row as confusion over energy tariff row escalates

 

David Cameron's pledge that gas and electricity consumers would automatically get the lowest tariff was thrown into confusion today as the Government staged a partial retreat.

Labour accused the Prime Minister of presiding over another "omnishambles" after John Hayes, the Energy Minister, stopped short of  repeating Mr Cameron's promise on Wednesday of legislation to ensure "energy companies have to give the lowest tariff to their customers."

Ed Davey, the Liberal Democrat Energy and Climate Change Secretary, whose department was in the dark about the surprise announcement, distanced himself from it. He suggested energy firms would be obliged to merely "offer" the cheapest tariff.

As Whitehall officials scrambled to draw up a policy to deliver Mr Cameron's promise, government sources admitted the final package might fall short of his precise words. They said the top priority was to help consumers, which would mean preserving competition between energy companies to keep prices down.

One option is for customers to be "offered" the lowest tariff from their own energy provider --but not the lowest on the market as a whole. Nick Clegg, the Deputy Prime Minister, made a similar  promise six months ago, based on voluntary action by the "big  six" energy companies. Ministers are frustrated that only about 15 per cent of consumers "switch" providers - and many of those that do are not low income families. So they want to encourage switching by legislation.

Today Mr Cameron refused to back down. Speaking in Brussels, he insisted: "I want to be on the side of hard-pressed, hard-working families who often struggle to pay energy bills. We are going to use the forthcoming legislation, the Energy Bill coming up this year, so we make sure, we ensure, that customers get the lowest tariffs. That's what we're going to do."

Downing Street sources said the Bill would ensure consumers got the lowest tariff in a way that preserved the choices they made about how they pay their bill and their type of tariff. One option is for people on a variable tariff who pay by direct debit to be informed they will be automatically switched to the lowest variable direct debit tariff offered by their provider. They could "opt out" of that process if they wished.  Officials believe such a system would promote competition between companies to offer the cheapest deals.

Answering an emergency Commons question tabled by Labour, Mr Hayes admitted he had not been forewarned about  Mr Cameron's announcement at Prime Minister's Questions.  He said: "We will use the Energy Bill to get people lower tariffs and of course there are different options to be considered in the process."

Caroline Flint, the shadow Energy Secretary, said: "It caused chaos in the energy industry and I have to say it left his own ministers at a loss as to what energy policy actually is. For the Government to spend a day pretending they have a policy they have no intention of implementing is no way to run the country. It is like something out of The Thick of It."

Business leaders warned that Mr Cameron's plan would damage the market and deter investors. Neil Bentley, deputy director-general of the CBI, said the statement had been "a bit of a surprise" to industry and was at odds with the idea of competition. "What this actually does is create a lot more uncertainty for companies who are looking to invest in the UK and investing in our infrastructure and new power stations," he told BBC Radio 4's The World At One.

But consumer groups urged Mr Cameron to stick to his original plan. Richard Lloyd, executive director of Which? said: "Just giving people information on the lowest tariff is not enough when trust is at an all-time low in the industry and switching levels are falling."

News
people Emma Watson addresses celebrity nude photo leak
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
News
Boris Johnson may be manoeuvring to succeed David Cameron
i100
News
peopleHis band Survivor was due to resume touring this month
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
people'It can last and it's terrifying'
News
In this photo illustration a school student eats a hamburger as part of his lunch which was brought from a fast food shop near his school, on October 5, 2005 in London, England. The British government has announced plans to remove junk food from school lunches. From September 2006, food that is high in fat, sugar or salt will be banned from meals and removed from vending machines in schools across England. The move comes in response to a campaign by celebrity TV chef Jamie Oliver to improve school meals.
science
Arts and Entertainment
tv
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Life and Style
fashionPart of 'best-selling' Demeter scent range
News
i100
Sport
Tom Cleverley
footballLoan move comes 17 hours after close of transfer window
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
Life and Style
fashionAngelina Jolie's wedding dressed revealed
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

ICT Teacher

£120 - £130 per day: Randstad Education Group: We are looking for an outstandi...

Art & Design Teacher

£120 - £130 per day: Randstad Education Group: We are looking for an outstandi...

Assistant Management Accountant -S/West London - £30k - £35k

£30000 - £35000 per annum: Ashdown Group: We are working with an exciting orga...

Deputy Education Manager

Negotiable: Randstad Education Sheffield: Deputy Education Manager required, S...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering