Millions of households could have gas and electricity prices cut

The Competition and Markets Authority has suggested energy prices should be temporarily capped for four million households on pre-payment meters

Samuel Osborne
Thursday 10 March 2016 08:18
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The proposals are intended to reform the energy market and increase competition, in order to help consumers save money
The proposals are intended to reform the energy market and increase competition, in order to help consumers save money

Millions of people could have their gas and electricity prices cut under a watchdog's proposal.

The Competition and Markets Authority (CMA) has suggested energy prices should be temporarily capped for four million households on pre-payment meters.

They will see £300 million slashed off their bills in total each year - around £80 to £90 each on average - under the regulator's plans to protect them with a price cap until 2020.

Energy suppliers will also be forced to open up consumer databases to allow rivals to offer those on standard variable rate tariffs better deals.

The CMA said British households could have been overpaying by around £1.7 billion a year.

Roger Witcomb, chairman of the CMA's energy market investigation, said: "We have found that the six largest suppliers have learned to take many of their existing domestic customers - some 70% of whom are on 'default' standard variable tariffs - for granted, not just over prices, but with their service and quality."

He said the CMA's report sets out a range of "bold, innovative" measures to improve competition in the energy market.

The report stated it wants to set a temporary price cap for low income and vulnerable customers who have pre-payment meters.

The proposals are intended to reform the energy market and increase competition, in order to help consumers save money.

Additional reporting by agencies

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