Similar to the seven-day current account switching service, the energy switching guarantee will ensure consumers can move provider with confidence.

The move is just one initiative announced in a wide-ranging Treasury report, entitled A better deal: boosting competition to bring down bills for families and firms.

The report said: “Competition fosters consumer choice, resulting in better products and services at lower prices and ensuring more disposable income in the hands of working people. It is essential to the UK’s long-term economic success.”

Millions of householders are paying too much for their energy, according to a report by the Competition and Markets Authority (CMA), which identified difficulties in moving provider as one of the biggest deterrents to switching.

The average household could currently save £160 from switching supplier, the Treasury said.

The current account switching service was launched in 2013 to make moving bank or building society easier. Two million consumers switched bank accounts in the first two years of the service, according to Bacs, which oversees the scheme.

James Padmore, head of energy, comparethemarket.com, said: “We believe strongly that an energy switching guarantee is essential in order to increase switching levels and drive competition in the market and it is great to see the Treasury acknowledge this. Consumers need the reassurance that a Government-backed guarantee can offer, as research has shown in the case of the Current Account Switching Service, and as it currently stands millions of households could be put off switching energy providers because of concerns around the process. However, without any specifics it remains to be seen how strong the switching guarantee will be.”

Among other initiatives outlined in the report, the government pledged to reduce the cost and hassle of switching mobile networks and establish a new Bank Start-Up Unit, making it easier for new banks to enter the market.

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