Default tariff cap working paper – market basket

Correspondence and other

Publication date

Industry sector

Supply and Retail Market

On 26 February 2018, the Government introduced proposals for legislation to Parliament, to introduce a temporary tariff cap for customers on Standard Variable (SVT) and default tariffs. This proposed legislation creates a new statutory role for Ofgem to deliver this measure for Government.  Ofgem will have a new duty to design and implement the tariff cap (the ‘default tariff cap’).

This document is the second in a series of working papers explaining how our thinking on the design of the default tariff cap is evolving as we gather views and evidence over the coming months. It discusses how the market basket approach to setting the initial level of the cap might work, and whether a market basket could be used to update the cap level over time.

We have not included questions in this paper, but are inviting comments on any or all of the issues raised. Please submit these no later than 13 April 2018 to our mailbox: