Legislation to cap energy prices for 11m households across Britain will go before parliament today.

The Domestic Gas and Electricity (Tariff Cap) Bill compels regulator Ofgem to implement the cap once the law has given it new powers.

The tariffs, which could save people up to £100 a year, would be limited until 2020, with the option to extend the cap annually until 2023.



Announcing the bill, which the government hopes will become law before next winter, Theresa May said it would “force energy companies to change their ways”.

A 2016 report found consumers were paying £1.4bn a year over the odds via energy companies’ standard variable tariffs (SVTs).

The prime minister said: “It’s often older people or those on low incomes who are stuck on rip-off energy tariffs, so today we are introducing legislation to force energy companies to change their ways.

“Our energy price cap will cut bills for millions of families. This is another step we are taking to help people make ends meet as we build a country that works for everyone.”

The idea of energy price freezes was originally floated in 2013 by then Labour leader Ed Miliband. He faced criticism from the Conservatives at the time but a plan for a universal price cap appeared in their manifesto last year.

After the election the prime minister passed responsibility to Ofgem, which faced criticism for only coming up with proposals to protect the most vulnerable.

Frustrated by the lack of progress from the regulator, May announced legislation to crack down on “rip-off” bills in her keynote speech at the Conservative party conference.

Rebecca Long-Bailey, the shadow business secretary, said the bill was welcome but criticised the government for not acting sooner.



“The government promised action on energy bills a year ago yet energy costs are still spiralling and four million households live in fuel poverty.

“A price cap is simply a temporary sticking plaster and the government must realise that they need to do much more to fix our broken energy market.”

Lawrence Slade, chief executive of Energy UK, which represents power companies, said: “It’s vital the cap doesn’t halt the growth of competition which is helping customers to find a better deal and save on their energy bills.

“It’s also important that the cap accurately reflects suppliers’ costs, most of which are out of their direct control.”