Greg Clark warns rip off energy companies to treat their customers fairly or they could face further action

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The government are preparing for a crackdown on energy companies who rip off their customers and exploit their loyalty.

Greg Clark used his first major speech as head of the newly created business and industrial strategy department to attack utility companies for complicated tariff regimes which confuse people into paying too much.

The business and energy secretary made it clear to energy companies that they “must all realise that you have responsibilities to your customers. That means treating them fairly. We cannot have companies that exploit the loyalty of their customers."

Customers with the Bix Six energy firms could be missing out on as much as £400 per year on their bills, research found earlier this year.

The speech echoed comments Theresa May made to Conservative party conference in October.

She said: "Where companies are exploiting the failures of the market in which they operate, where consumer choice is inhibited by deliberately complex pricing structures, we must set the market right.

"It’s just not right that two thirds of energy customers are stuck on the most expensive tariffs."

First Utility, one of Britain's biggest independent energy suppliers, said earlier today it expects government action.

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"I think the government will do something to intervene in the market," Ed Kamm, UK managing director at First Utility, one of the independent firms seeking to win market share from the incumbent "Big Six" energy suppliers, told Reuters at the Energy UK conference.

"It's unclear what that would be, but Theresa May set out her stall at the (ruling Conservative party) conference and said she wanted to do something about people on high tariffs so we expect the government to take some action," he said.

At Energy UK's annual conference this afternoon Clark announced the launch of a joint call for evidence on smart technology with Ofgem to help customers make more savings.

"The aim is to harness the potential of storage, demand side response and other technologies to create the most efficient, most productive electricity system in the world," Clark will say. "If we do this right, a smart system could save consumers up to £40 billion in the coming decades."

Yesterday the government signalled it would phase out coal-powered stations by the middle of the next decade as it seeks to move towards more renewable energy and gas.

It committed to spend £730m each year on renewable energy projects over the course of the parliament.

Clark said UK needs energy which is "cheaper and as reliable as coal" but carbon-free.