David Cameron has responded to concerns over rising energy bills by pledging to force electricity suppliers to automatically offer customers their cheapest deal.

The announcement comes shortly after consumer group Which? sent an open letter to the Prime Minister calling for an independent review into rising energy bills.

Executive director of Which?, Richard Lloyd, said: “Legislating so that energy companies have to give the lowest tariff to their customers is a big statement from the Prime Minister and acknowledges that competition in the energy retail market has failed. This is a big moment for consumers, but we must now see these words turned into action and see the detail from the government in the Energy Bill.”

Despite many welcoming the announcement, comparison site uSwitch expressed concern over the lack of competition this will produce and Labour has said the measures will prove ineffective.

Caroline Flint, the shadow energy secretary, said: “The government’s last-minute decision to force energy companies to put customers on the cheapest tariff, after most energy companies have already announced price hikes, is an admission that their ‘do nothing’ energy policy over the last two years has failed.

“The cheapest deal in an uncompetitive market will still not be a good deal for the public unless we completely overhaul our energy market to break the dominance of the ‘big six’ energy companies and create a tough new watchdog with powers to force energy companies to pass on price cuts.”

The Prime Minister's spokesman said customers would have to wait until the energy bill is published for details of how the change would work in practice. He added that the move did not mean energy companies would end up offering only one tariff, as different customers would need different rates.