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Energy companies support John Penrose MP's calls for a new cap on energy price increases

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John Penrose MP, has said that he is 'delighted' that energy companies are supporting his plan to reduce energy prices for millions.

Three energy companies have joined the former Minister in calling on the Government to implement a ‘relative price cap’ to protect energy consumers.

Penrose has secured a debate in the House of Commons on Thursday 16th March which has been backed by more than 50 MPs, including Labour MP, Caroline Flint, and SNP MP, Patricia Gibson.

Speaking in advance of the debate and after his meeting with the BEIS Secretary, Greg Clark MP, to discuss the plans, Mr Penrose said:

“I’m delighted that the industry is reacting positively to this plan.

“Loyal customers are being systematically ripped off by big energy firms, and it’s just not fair. Most industries don't exploit their best customers like this, by quietly switching them onto expensive default tariffs when their existing deal comes to an end. Loyalty should be rewarded, not exploited.

“The House of Commons has a huge opportunity on Thursday to give the Energy Secretary a mandate to implement a relative price cap in order to protect energy consumers.”

Stephen Fitzpatrick, CEO and Founder, OVO Energy, said:

“At OVO Energy we believe in free markets and the power of competition, but almost 20 years after privatisation, it’s clear that the energy market is failing the customers it should serve. All efforts to date - from the expensive and time-consuming CMA inquiry, to the relentless tinkering by Ofgem - have failed to protect consumers and address the lack of consistency on pricing. Energy companies remain free to charge whatever they think they can get away with, at the expense of disengaged or confused customers. This has to change.

"The time has come for the Government to step in and take bold action to protect consumers’ interests. We welcome John Penrose’s ‘relative price cap’ proposal as a step in the right direction towards long term fair pricing for all. Creating a link between SVTs and the cheapest tariffs in the market will help everyone benefit from competition, drive more innovation and ultimately lead to lower bills for millions of people.”

Andrew Lindsay, CEO of Utility Warehouse said:

“We strongly endorse the proposed introduction of a relative price cap. This practical solution will create a fairer energy market and promote competition, whilst helping to protect customers who have little desire to switch supplier on a regular basis.”

Greg Jackson, founder and CEO of Octopus Energy said:

“Energy customers are being robbed in broad daylight, and it's time for decisive action to end the misery for millions.

“These simple proposals would be quick to implement and would dramatically improve the market for millions of people, and force energy suppliers to think long and hard about how to give customers good value in a competitive market, rather than hiding behind rules and regulation.

"For far too long the practice of 'tease and squeeze' pricing has been used by the Big Six to bamboozle and exploit millions of loyal customers, costing them hundreds of pounds a year too much. We wholeheartedly welcome this proposal to make that practice history and bring fairer prices to everyone.”

In Thursday's debate Mr Penrose will outline the fact that 90% of the population is entirely disengaged from the energy market and that 20 million of us (two thirds of energy consumers) find ourselves on the rip off Standard Variable Tariff (SVT) (see latest Ofgem figures: link) and need protection.

Mr Penrose will say that in order to correct this appalling market failure, Ofgem must ban energy companies from charging SVT customers a price that is more than 6% above their most competitive (advertised) rate.

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