Imposing a price cap is justified because the domestic energy market is “broken”, according to the House of Commons’ Business, Energy & Industrial Strategy (BEIS) Committee.

In a report into the UK Government’s plans to introduce a price cap, the MPs concluded that 12 million customers were being penalised for staying loyal to their current energy company.

It said that customers on standard variable tariffs (SVTs) were paying up to £300 more than they needed to for their power.

The committee criticised energy regulator Ofgem for being slow to act and called on it to move faster in future to protect consumers.

Big six ‘whine and wail’

Rachel Reeves, Chair of the BEIS Committee, said: “The energy market is broken.

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

“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.”

> Read the report