The Businesses, Energy and Industrial Strategy (BEIS) Select Committee has said it is essential that energy caps are introduced in order to protect the most vulnerable customers from being ripped off.
According to the MPs, the Big Six energy firms have over charged its customers for years and have brought the limit to bills upon themselves.
As a result, the BEIS select committee have supported a planned absolute cap in an attempt to fix the “broken” market.
The committee also criticised Ofgem for failing to protect the most vulnerable customers, which comes after the regulator raised its safeguard tariff, aimed at protecting vulnerable and pre-payment customers.
Labour’s Rachel Reeves, chair of BEIS, said: “The energy market is broken. 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.
“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 (standard variable tariffs) for years and their recent feeble efforts to move consumers off these tariffs has only served to highlight the need for this intervention.”
According to a BEIS report, customers are paying £1.4 billion more than they should be, with 12 million stuck on poor-value tariffs, due to a “clear lack of will” from the Big Six to take action to prevent this happening.
The report said: “We conclude that the Big Six have brought this policy intervention upon themselves by raising their prices in 2017 and by failing to take effective action against the overcharging of their customers on default and standard variable tariffs.”