Reducing the number of tariffs for each supplier would still provide enough space for suppliers to compete, and would make it easier for more consumers to engage and exercise informed choice. It is a sensible move and suppliers could do it now. The success of this initiative will depend on how energy companies implement the change and how the regulator Ofgem takes it forward.
There is a risk of unintended consequences and in particular a general levelling up of prices. Ofgem will need to police the behaviour of suppliers and be vigilant about the level of margins that suppliers take from their remaining tariffs. Consumers must not end up as net losers.
It is possible that some of the best deals on the market will disappear. We could lurch from a minefield of deals to virtually none at all.
Downing Street sources are adamant tomorrow's energy bills announcement will stick to David Cameron's promise of lower tariffs, but will it?
Ministers are poised to announce plans to decrease energy bills in a bid to get customers on the lowest tariffs available.