Britain's May says will introduce energy cap if re-elected
- Author: Sonia Alvarado May 10, 2017,
May 10, 2017, 3:21
Consumer group and industry leaders are warning that Theresa May could drive energy prices for vulnerable consumers even higher if she places a price cap on "standard" energy tariffs as part of the Conservative Manifesto ahead of the General Election on 8 June.
"Michael Fallon, the current defence secretary, who was energy minister then: he called it risky, he said it would kill investment, hurt consumers", Davey told the BBC's Radio 4. And she dismissed suggestions that it was a repeat of an energy price freeze dismissed as "Marxist" by David Cameron when it was proposed by Ed Miliband in 2015.
Energy bills have doubled in Britain over the past decade to about 1,200 pounds ($1,500) a year, putting the biggest providers in the sights of politicians and voters who are already battling rising inflation and limited wage growth.
Ed Davey, the former Lib Dem energy secretary, told Sky News the Conservatives' policy could actually make costs rise for some Britons.
The chief executive of energy trade body, Energy UK, has said the proposed cap on bills "effectively risks giving up on competition at a time when we need engaged consumers more than ever".
The Conservatives have claimed their price cap on standard variable tariffs would save 17 million families around £80 to £90 a year, or as much as £100 in some cases.
The new plan was first announced last month and many industry figures do not agree with it as they believe it could lead to higher prices.
"Under our cap, prices will be able to come down".
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A cap on standard variable bills carried "excessive risks of undermining the competitive process, likely resulting in worse outcomes for customers in the long run", the CMA concluded.
"Too many people simply aren't getting a fair deal", she says.
Boris Johnson gave his two cents, proclaiming: 'Miliband says he will imitate the catastrophic policies of the emperor Diocletian, by imposing a price freeze on energy bills for the 20 months succeeding the election'. That would imply that if wholesale prices continue creeping up, as they have in Ofgem's cost supplier index, bills will go up despite the cap.
Labour recognised this before the last election when it pledged to cap prices.
"The CMA's thorough two-year investigation identified low levels of consumers switching energy providers as a challenge, and put forward a range of recommendations to address this", Hardie said.
"It is important that these measures bed in before looking to further interventions".
Shares in Centrica have fallen 15% since the start of this year and some are speculating that it may cut its dividend to shareholders to cope with an estimated £200 million hit to profits from the cap.
The Confederation of British Industry, which represents the country's biggest companies, also voiced concern, saying a "major market intervention" could hit investor confidence.