Energy minister fails to back up Cameron pledge

David Cameron's pledge that gas and electricity consumers would automatically get the lowest tariff was thrown into confusion yesterday 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 to pass legislation ensuring "energy companies have to give the lowest tariff to their customers".

It is understood that the Department for Energy and Climate Change was in the dark about the announcement. Ed Davey, the Liberal Democrat Energy Change Secretary, suggested energy firms would be obliged merely to "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. 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.

Yesterday Mr Cameron, who was in Brussels, 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 Energy Bill [to ensure] that customers get the lowest tariffs."

Downing Street sources said the Bill would ensure consumers got the lowest tariff in a way that preserved their choice of payment method and tariff type. Business leaders warned that Mr Cameron's plan would damage the market and deter investors. Neil Bentley, deputy director-general of the CBI, told BBC Radio 4 that it would "create a lot more uncertainty for companies who are looking to invest in... our infrastructure".

But consumer groups urged Mr Cameron to stick to his 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."

Answering an emergency Commons question tabled by Labour, Mr Hayes admitted he had not been forewarned about Mr Cameron's announcement. 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."