UK: Tories protest May’s energy price cap as it ‘throttles competition’

A Tory revolt was underway today as Theresa May unveiled energy price controls that placed an absolute cap on bills.

Business Secretary Greg Clark is publishing draft laws today in a bid to force regulator Ofgen to toughen up its own plans to protect consumers. The Government plans place a maximum bill on standard rate tariffs and will stop price increases on 18 million customer accounts for three years.

But ex-Tory minister John Penrose – who organised a lobby of 213 MPs from across the Commons to demand a price cap – said Mrs May’s plan would ‘throttle competition’. Mr Penrose said a relative price cap, where standard tariffs are tied to a firm’s cheapest deals, would maintain competition while stopping rip off deals.

Just a handful of Tory rebels could doom Mrs May’s draft laws if they fail to win Labour’s support. Jeremy Corbyn’s party wants much tougher controls.

Announcing her draft plans today, Mrs May said, “I have been clear that our broken energy market has to change – it has to offer fairer prices for millions of loyal customers who have been paying hundreds of pounds too much.”

A temporary relative price cap puts the customer in charge, so energy firms compete to offer the best, most creative and attractive deals, Mr. Penrose said.

“An absolute cap would throttle competition, be out of date as soon as the wholesale price of gas goes up or down, and energy firms would spend more time lunching their regulators than delighting their customers.”

Full Content: The Sun & Financial Times

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