ENERGY price caps are still higher than the “wholly inadequate” level set in January, Labour said today.

Around 15 million households will have their gas and electricity bills drop this winter after watchdog Ofgem cut price caps designed to protect those on poor-value deals. The annual cap will go down by £75 to £1,179 from October 1 due to lower wholesale market prices.

The regulator also said that the annual price cap for around four million pre-payment meter customers will fall by £25 to £1,217 from the same date.

Ofgem said wholesale energy costs had fallen “significantly” since it last reviewed the price caps in February.

But the default price cap is still more than the £1,137 level set when it was first introduced in January this year.

Labour’s shadow business secretary Rebecca Long Bailey said: “Even after these changes, the cap will still be higher than the level set in January, which itself was wholly inadequate to protect households.

“The key point is that the retail market, left to its own devices, will systematically overcharge inactive customers.

“This is unacceptable, and Labour will fundamentally reform the system.”

Consumer group Which? praised the new price cap but called on companies to reduce tariffs before the October deadline.

Which? head of home products and services Natalie Hitchins said: “To benefit from the best deals on the market customers should consider switching providers. You could save over £400 a year and potentially receive better customer service too.”

Ofgem will review the level of the cap again in February 2020.