Ministers Fuel Energy Row With £5m Campaign

Ministers are poised to ignite a new row over energy prices by launching a multimillion pound taxpayer-funded advertising splurge less than three months before the General Election.

Sky News has learnt that the Department for Energy and Climate Change (DECC) has approved a campaign highlighting energy market reforms which have made it easier for consumers to switch providers.

The initiative, which is understood to include a voiceover by the actress Charlotte Rampling, is due to be unveiled next week, with the provisional slogan 'Power To Switch'.

DECC insiders said the decision to launch the advertising push - likely to comprise roughly £5m of media spending - came in the wake of measures to halve energy-switching times and securing agreement from the six major gas and electricity suppliers to return unused credit in customer accounts.

The timing of the campaign is contentious, however, with Whitehall going into its conventional pre-election 'purdah' period around the end of March.

A £5m budget for a push lasting approximately five weeks implies that it will be highly visible during the period, a media industry source said.

The Government campaign may also be controversial because it comes in the middle of an inquiry into the energy market by the Competition and Markets Authority, which is expected to provide an update on its progress next week.

The debate over energy prices and market reforms has been among the most fiercely contested in Westminster since Ed Miliband, the Labour leader, pledged to freeze prices until 2017 if his party wins in May.

News of DECC's planned campaign sparked an angry response from Labour, with Caroline Flint, the party's energy spokeswoman, telling Sky News:

"Not even a £5m marketing budget can hide this Government’s failure on rip-off energy bills.

"Of course we should encourage people to check if they could save money with a different tariff, but just lecturing people to shop around won’t fix Britain’s broken energy market," she said.

"If the Government really want to do something to help people with their energy bills, instead of splurging millions of pounds on this pre-election stunt, they should back Labour’s plan to freeze prices until 2017, so that bills can fall but not rise, and give the regulator the power to force companies to cut their prices when wholesale costs fall."

All six of the big energy companies - British Gas, EDF Energy, EOn (Taiwan OTC: 3411.TWO - news) , Npower, Scottish Power and SSE - have announced price cuts in recent weeks, following robust interventions from ministers representing both Coalition parties.

Sky News revealed at the weekend that Ed Davey, the Energy and Climate Change Secretary, was planning to spearhead a renewed push to encourage the public to consider alternatives to their existing gas and electricity tariffs.

Last week, the consumer group Which? said the energy companies had failed to pass on price cuts in full despite a round of recently announced reductions, costing the average household £145 a year.

The group said its research highlighted a failure to align retail prices with wholesale costs, which meant that consumers had paid an extra £2.9bn during the last year.

Ministers are expected to use next week's campaign to say that households which shop around could save more than £200 annually on their energy bills, as well as benefiting from a new Confidence Code agreed between Ofgem, the industry regulator, and switching sites.

Matthew Hancock, the Conservative Business and Energy Minister, met the bosses of the big six companies last month to discuss whether recent price cuts were sufficiently generous to consumers.

Some energy company bosses, including Npower chief executive Paul Massara, replied by arguing that political factors had made price reductions harder to justify commercially.

A Whitehall insider said on Thursday that the latest ad campaign would help to raise awareness about the process of energy-switching.

"We've been very clear that consumers should get the best deal and pay the lowest possible price for their energy.

"People should be aware of all the options available so they can shop around and find what works for them.

"That's the whole point of the campaign - empowering people."