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."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
food + drinkAuthor DBC Pierre presents his guide to the morning after
Two christmas trees ,Moonbeam (2L), Moonchester (2R) and Santa Claus outside the Etihad Stadium
footballAll the action from today's games
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drink
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas