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Telegraph: Energy bills cap to protect loyal customers

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Energy prices would be capped at 6 per cent above the cheapest deals under a proposal to protect loyal customers.

John Penrose, a Conservative MP, said that a “relative price cap” would protect households that did not switch supplier. He has written to Greg Clark, the business and energy secretary, and Ofgem saying that many customers would never switch despite measures to encourage them to do so.

About two thirds of households in Britain are still on the expensive standard tariffs of the big six suppliers.

Mr Penrose said: “For too long, energy companies have gouged customers who are too busy to go through the hassle of switching suppliers. We can’t solve this problem by bullying people to start switching.”

A government source said that all options were on the table, including a relative price cap such as that backed by Mr Penrose. A green paper on consumer markets is due by April.

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