Plans for a price cap on 'rip-off' energy bills to go before Parliament

More than 18 million households are on standard variable or default tariffs

Feeling the heat: the Big Six energy companies will have their tariffs capped (Getty)

Plans for a price cap on “rip-off” energy tariffs will go before Parliament today to prevent millions of customers paying over the odds on their bills.

The Government is set to publish draft legislation that would allow the energy regulator Ofgem to cap poor-value tariffs that punish loyal customers who do not shop around for a better deal.

More than 18 million households are currently on standard variable or other default tariffs and the market watchdog found customers paid out some £1.4bn a year more than they needed to in bills.

The long-awaited cap was intended as a key announcement in Theresa May’s party conference speech last week but the event was derailed by a prankster, a coughing fit and a collapsing set.

The price-cap plans come after Ofgem announced it would save customers £120 a year by extending its prepayment price cap to a million additional households this winter.

Speaking ahead of the bill’s publication, Ms May said: “I have been clear that our broken energy market has to change – it has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much.

“Today’s publication of draft legislation is a vital step towards fixing that, and is offering crucial peace of mind for ordinary working families all over the country.”

Cross-party MPs will scrutinise the draft legislation, which has received support from both sides of the House, with nearly 80 Tory MPs urging the Prime Minister to revive her election pledge.

Business Secretary Greg Clark said: “The energy market is broken. It punishes loyalty – the independent competition authority found millions of people who are customers of the Big Six suppliers are overpaying to the tune of £1.4bn a year.

“That is simply wrong. While five million households will see their bills capped from this winter, I want to see every household protected from rip-off bills.

“That is why we have published this draft legislation today – sending a clear message to suppliers they must act to put an end to loyal consumers being treated so unfairly.”

The Prime Minister’s announcement came as a surprise to the energy industry as the UK’s Big Six gas and electricity suppliers saw billions wiped off their stock market valuations after Ms May outlined her plans to the party faithful in Manchester.