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PA

A worth cap on power payments could possibly be prolonged to many extra households on low incomes, below plans being thought-about by regulator Ofgem.

A restrict on the price of fuel and electrical energy for these on pre-payment meters already saves about 4 million individuals £80 a 12 months.

This could possibly be prolonged to others on sure advantages.

The proposals come after a a lot wider cap within the Conservative manifesto was absent from the Queen’s Speech.

As a substitute, the federal government mentioned ministers have been “contemplating one of the best ways” to guard these on the poorest-value tariffs.

Enterprise Secretary Greg Clark wrote to Ofgem to problem the regulator to make use of its present powers to cut back payments.

The announcement from Ofgem lists a variety of proposals overlaying billing and switching.

Final 12 months, a landmark investigation by the Competitors and Markets Authority concluded that many households on normal variable tariffs have been paying an excessive amount of for his or her power.

It calculated customers have been overpaying by as much as £1.2bn a 12 months.

This led to a cap – set regionally – on the price of power for these on pre-payments meters.

5 of the “huge six” power suppliers raised costs for different clients earlier this 12 months, regardless of stress not to take action. Ofgem mentioned such rises weren’t justified.

The Conservative manifesto advised the power market was not working for customers and, in a widely-debated transfer, advised a tariff cap to guard 17 million individuals paying normal charges. This is able to have saved them as much as £100 a 12 months.

Nonetheless, after the election, new laws required for the cap was lacking from its plans for the subsequent two years.

As a substitute, it put the ball again in Ofgem’s court docket.

Now the regulator has mentioned it’s going to maintain a summit in July with client teams on the way it might prolong the pre-payment meter cap to different households.

Residents Recommendation has already advised that two million further households which obtain the Heat Properties Low cost ought to get the identical safety, together with some pensioners and households with younger kids.

Different Ofgem proposals embody:

  • A trial that may permit households to enter solely their postcode and present provider right into a “digital deal checker” to view the most affordable tariff
  • Requiring suppliers to tell clients of cheaper offers with rival corporations, below a trial scheme
  • A clickable choice on all worth comparability web sites to make sure clients see costs in the entire of the market, not simply most popular suppliers
  • A cap on the costs levied when a pre-payment meter is put in below warrant.