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How the energy price cap could leave some customers worse off

The cap will save customers on average £75 a year. Photo: PA

The Government is eager to claim credit for today’s energy price cap proposal that Ofgem says will save customers on average £75 a year.

The Energy and Clean Growth Minister Claire Perry says today’s proposals "are a step forward as this Government delivers an energy market that puts consumers at its heart," but in actual fact the new cap could prove an own goal for customers.

It is certainly true that millions should now save significantly however there are fears it will backfire by making it less likely people will switch.

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Consumers could be lulled into a false sense of security that the price cap means they are automatically on a good deal.

Customers will still be able to make far larger savings by moving supplier to the best deals on the market.

The other danger is that energy companies will adapt their pricing by narrowing the gap between standard variable tariffs and their best fixed term deals.

In effect that would penalise the consumers that go to the effort of switching - by increasing their prices.