Government scrambles to clarify Cameron's energy pledge

LONDON (Reuters) - The government scrambled on Thursday to clarify Prime Minister David Cameron's unexpected pledge to parliament that energy suppliers would be forced to give customers their cheapest tariffs.

Energy Minister John Hayes, called to an urgent questions session at the Commons by the Labour Party, said the government was only considering introducing such a law.

"The government is considering this policy as part of inclusion in the Bill," Hayes told parliament's lower house, referring to an energy bill due in November.

Cameron's comments on Wednesday were stronger than this and followed energy suppliers including British Gas and RWE npower boosting tariffs on retail gas and electricity prices for the coming winter season.

"I can announce that we will be legislating so that energy companies have to give the lowest tariff to their customers," Cameron had told parliament.

His statement took energy companies by surprise and it remained unclear whether firms would be obliged to put consumers on the lowest tariff or just offer it.

"We were not expecting the announcements that have been made by the prime minister," said Angela Knight, head of trade association Energy UK.

The opposition accused Cameron of throwing policy into disarray and questioned whether such legislation was actually in the works.

"It is another shambles and the prime minister is at the heart of this, because he put this policy out there and everyone is running around now to redefine it," Shadow Energy Secretary Caroline Flint told BBC TV.

"There was nothing in the white paper from the government on this, there was nothing in the draft bill on this, and now they are trying to cobble together energy policy," Flint said, adding Cameron should admit it was a "slip of the tongue".

Cameron, visiting Brussels on Thursday, appeared to moderate his language on what the energy bill would achieve.

"I want to be on the side of hard-pressed, hard-working families who often struggle to pay energy bills," he said.

"That is why I said in the Commons yesterday we are going to use the forthcoming legislation, the Energy Bill, coming up this year, so that we make sure, we ensure, that customers get the lowest tariffs," he told reporters.

TARIFF CONFUSION

The prime minister's spokeswoman denied he had misspoken on Wednesday, saying he had "set out his intention", adding that details would be provided in the pending energy bill.

However, she also seemed to soften Cameron's message when she said the government would be requiring companies to offer the lowest tariffs, which is in line with a policy announced in April.

"At the moment people take advantage of the lowest tariffs by switching from supplier to supplier, but only very few people do that," she said.

"The proposals that we are going to bring forward is about encouraging more competition between companies and it is getting the market working for all consumers, rather than just a small minority who currently switch," she said.

One option under consideration was requiring firms, who offer a variety of pricing plans, to automatically switch customers to the lowest tariff within the payment option they had chosen, Cameron's Downing Street office said in a statement.

"We think approaches like this will make things more transparent and promote competition between the companies to offer the cheapest tariffs," the statement added.

(Reporting by Oleg Vukmanovic, Tim Castle and Susanna Twidale; editing by Jason Neely and Anthony Barker)

Source: http://news.yahoo.com/government-scrambles-clarify-camerons-energy-pledge-173224792--finance.html

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