Clegg announcing energy tariff deal

Energy companies will write to customers every year telling them the best deal for their household, Nick Clegg is due to announce.

Customers could save £100 a year by switching their tariff, but 70% of households pay more than they need because they are not on the best rate.

The Deputy Prime Minister hopes a new agreement with Britain's six biggest energy firms will offer customers the most efficient deal, driving down gas and electricity bills. In a speech, he will say ministers "cannot control volatile world energy prices", but will claim the Government can help people cut their bills.

He is expected to say: "We have secured a landmark deal with the six big energy companies who cover 99% of customers, to give customers a guaranteed offer of the best tariff for them.

"Right now, seven out of 10 customers are on the wrong tariff for their needs, so are paying too much. Yet people rarely switch, despite the fact some families could save up to £100 a year.

"There are currently over 120 different tariffs, making it very difficult to know where to start. That is going to change. As of this autumn, your supplier will have to contact you with the best tariff for your needs - and if you call them, they'll have to offer you the best deal too."

He is also expected to use his speech at KPMG in London's Canary Wharf to announce a new scheme where companies will print barcodes on bills, allowing customers to scan the code on their mobile phones, linking them to the best energy tariffs.

Audrey Gallacher of Consumer Focus said alerting customers to the best deal was "long overdue". But she added: "While any move to help energy customers to get the best deal is welcome, it has to be the right method to reach people and the benefit must outweigh the cost.

"This needs to be more than a one-off mail shot and part of a wider strategy to help people overcome the burden of having to navigate hundreds of complex tariffs to get a decent price. Unfortunately, people don't trust energy firms and previous mail-outs have not always had the best take-up."

Richard Lloyd, of Which?, said: "Most people find it much too complicated to work out how much they should be paying for gas and electricity so these moves to make it easier to find a cheaper deal are an important step forward at a time when so many are struggling to pay their bills."