Strongarm coalition forces cheaper bills on energy firms

Energy firms will be forced to give consumers the cheapest deal available after all, with more details of the government's plans expected later.

David Cameron was accused of making up government policy after announcing in prime minister's questions that new legislation would force energy companies "to give the lowest tariff to their customers".

That appeared to surprise frontbenchers, not least of all Ed Davey. But later today, after an autumn in which energy prices have increased by around ten per cent, the Liberal Democrat energy and climate change secretary is expected to outline the details of the policy in an appearance before MPs this evening.

The prime minister's spokesperson said this morning the government's goal is "to help hard-working families who often struggle to pay energy bills".

Under the changes, energy companies will be forced to simplify the confusing array of deals on offer by slimming down the number of tariffs to just four.

Critically, they will be legally obliged to give their consumers the cheapest one of those four on offer. Consumers can opt to choose a more expensive one if they wish to do so.

Experts warned that some customers on the cheapest of the deals available at present could end up paying more as a result of the changes.

But the move is being welcomed by consumer groups. It goes further than a set of proposals put forward by regulator Ofgem this autumn.

"The cheapest deal in an uncompetitive market will still not be a good deal," shadow energy secretary Caroline Flint said.

"Unless David Cameron stands up to vested interests in the energy market and creates a tough new watchdog with powers to force energy companies to pass on price cuts his warm words will be cold comfort to people worried about paying their fuel bill this winter."

Today's expected announcement comes after environmental group WWF hit out at the coalition's climate change policies.

The organisation was behind Cameron's 'husky hugging' 2006 trip to Svalbard, but now feels the Conservative leader has "lost his voice" on energy issues.

"On becoming prime minister, Mr Cameron suggested he would be the 'fourth minister' at the Department of Energy and Climate Change and that his would be the 'greenest government ever'," WWF's chief executive David Nussbaum said.

"But since 2010, he seems to have lost his voice. There is currently a complete breakdown in government energy and climate change policy, sending mixed signals to investors and undermining job creation.

"David Cameron's continued silence would be a betrayal not just of the prime minister's election promises, but of the UK national interest."

Green campaigners were frustrated when Conservative energy minister John Hayes spoke out against onshore wind energy recently.

Davey wrote to Cameron demanding an end to Hayes' hostility, according to the Financial Times newspaper. Cameron has reportedly refused to intervene in the dispute.