Black Country MP calls for consumer pricing law change on deals for new customers

Warley MP John Spellar said his Consumer Pricing Bill will prevent customers being "punished for their loyalty" and reduce the need for people to shop around every year for a new deal.

The legislation, which will undergo its second reading before MPs this week, will apply to products and services including insurance and energy companies.

Labour MP Mr Spellar, said: "When you go to fill up your car you get charged the same amount whoever you are, yet this simple principle doesn't apply in many other areas. That is why I've put a Bill before Parliament.

"The insurance companies were supposed to give a better deal to their loyal customers and they need to be kept to that, and others, especially energy companies should follow suit.

"I hope the Government will either support my Bill or bring forward proposals of their own to support hard pressed consumers."

Earlier this year the Financial Conduct Authority (FCA) brought in new rules aimed at blocking insurers from quoting policyholders a higher price to renew their home or motor insurance than they would offer a new customer.

It followed years of complaints that customers who regularly switched insurer were paying significantly lower premiums than those who renewed.

A review had found insurers were attracting new customers with artificially low prices and then increasing premiums in subsequent years – a practice known in the trade as 'price walking'.

The FCA said the change was expected to save consumers £4.2 billion over the next 10 years.