Ministers Plot New Energy Switching Drive

By Mark Kleinman, City Editor

Ministers are to unveil a fresh drive urging consumers to switch energy companies just weeks before the main parties pledge renewed oversight of the industry in their general election manifestos.

Sky News understands that Ed Davey, the Energy and Climate Change Secretary, will spearhead a renewed push to encourage the public to consider alternatives to their existing gas and electricity tariffs.

Mr Davey's latest intervention, which Whitehall insiders said would take place the week after next, is designed to remove the sting from Labour's repeated accusation that the Coalition has done too little to help millions of consumers.

This week, the consumer group Which? said the big six energy companies had failed to pass on price cuts in full despite a round of recently announced reductions, costing the average household £145 a year.

The group said its research highlighted a failure to align retail prices with wholesale costs, which meant that consumers had paid an extra £2.9bn during the last year.

The Government's new switching push will not specifically target customers of the six biggest suppliers – British Gas, EDF Energy, E.On, Npower, Scottish Power and SSE – but will highlight the recent cut in the time it takes to switch provider.

Last month Mr Davey claimed the Government had "introduced more competition in the energy market and made it much quicker for people to switch energy supplier".

"Industry is delivering on my challenge so now my challenge is for more consumers to take advantage. There's never been a better time to shop around, switch and save money faster than ever before," he said.

Mr Davey added that companies were being challenged to further reduce the switching timetable to 24 hours as soon as possible.

Ministers are expected to use this month's initiative to say that households which shop around could save more than £200 annually on their energy bills, as well as a new Confidence Code agreed between Ofgem, the industry regulator, and switching sites.

Matthew Hancock, the Conservative Business and Energy Minister, met the bosses of the big six companies last month to discuss whether recent price cuts were sufficiently generous to consumers.

"Political factors have... become increasingly significant over the last few years, particularly as we approach the UK general election," Paul Massara, Npower's chief executive wrote in a letter to Mr Hancock ahead of their meeting.

"Any change in prices in the short term will inevitably have to take account (of) potential outcomes after May this year," he added.

The price cuts have been announced even though Labour leader Ed Miliband plans to freeze energy prices until 2017 if the party wins the General Election in May.

Last month Labour was defeated in a House of Commons vote to secure support for powers for the regulator, Ofgem, to be able to force companies to reduce consumer bills in line with wholesale price movements.

Labour was forced to adapt the language of its energy policy, insisting that the freeze was actually intended to be a cap, although it continues to use the original language in online material promoting one of its flagship policies.

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