What is really going on in politics? Get our daily email briefing straight to your inbox Sign up Thank you for subscribing We have more newsletters Show me See our privacy notice Invalid Email

Greedy energy giants have only themselves to blame for a looming fuel price cap, MPs reveal today.

The Big Six face a crackdown after years of hammering loyal customers with inflation-busting bills, according to the Commons Energy Committee.

MPs say the firms “have brought the introduction of a price cap upon themselves by their raising of prices in 2017 and by failing to take effective action against the overcharging for years of their customers on default and standard variable tariffs”.

About 12 million customers stuck on standard variable and default tariffs are forking out up to £300 more than other consumers each year, a report published today warns.

(Image: Reuters)

Committee chairwoman Rachel Reeves said: “The Big Six energy companies might whine and wail about the introduction of a price cap but they’ve been overcharging their customers on default and SVTs for years and their recent feeble efforts to move consumers off these tariffs has only served to highlight the need for this intervention.”

Unveiling their 40-page report into the draft Domestic Gas and Electricity (Tariff Cap) Bill, MPs blast energy suppliers for offering cheap deals to “engaged customers who switch, whilst making substantial profits from ‘sticky’ customers on expensive variable tariffs who do not or rarely switch”.

The privatised energy market “has been dysfunctional for years”, it says, accusing industry watchdog Ofgem of being “too slow and reluctant to use its powers to step in and protect the interests of customers, especially vulnerable customers”.

It called on the regulator to be “faster and more proactive in using its extensive powers to protect consumers from overcharging in the future”.

Backing an absolute price cap rather than a relative cap favoured by some companies, the report warns that “a relative cap risked substantially increasing prices for many consumers and more so than an absolute cap”.

But it supported Government moves to make a cap temporary.

Senior Labour backbencher Ms Reeves said: “The energy market is broken.

(Image: Getty)

“Energy is an essential good and yet millions of customers are ripped off for staying loyal to their energy provider.

“An energy price cap is now necessary and the Government must act urgently to ensure it is in place to protect customers next winter.”

Fuel firms have spent years slapping loyal consumers with ever-rising bills.

Last August British Gas said it would lift electricity prices by 12.5% from September, clobbering 3.1 million customers.

(Image: PA)

Last March, SSE said electricity bills would rise by 14.9% from April for 2.8 million customers, adding £73 to a dual fuel bill.

It came after Scottish Power announced its standard electricity prices would increase by an average of 10.8% and gas by 4.7% in March last year.

Npower hiked standard tariff electricity prices by 15% and gas prices by 4.8%; EDF Energy’s electricity prices rose by 8.4%.

And E.On lifted electricity prices by an average of 13.8%, and gas prices by 3.8%.

(Image: Image Source)

Energy UK chief executive Lawrence Slade said: “With a record one in six customers switching last year and over 60 suppliers to choose from, the energy market is changing rapidly and has never offered so much choice.

“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.

“Ofgem’s decision to raise the level of the prepayment cap last week shows how these costs can increase.

(Image: PA)

“Suppliers will remain committed to further improving engagement and choice for all their customers and doing more to support those in vulnerable circumstances.”

But Citizens Advice chief executive Gillian Guy said: “As this report makes clear, both loyal and vulnerable energy customers have been the victims of a dysfunctional market and have been ripped off by energy companies for too long.

“An absolute cap, as recommended by the committee, is crucial to securing protection for the largest number of customers while continuing to provide competition in the market. This should apply to all default tariffs.”