Energy bill cap ‘will hit consumers’


The Tories are planning to include the pledge in their election manifesto, a cabinet minister said on Sunday, reports the BBC.

But Scottish Power, one of the “Big Six” energy firms, told the BBC that the move would “stop competition”.

It would also “damage customers in the long run”, said Keith Anderson, chief corporate officer of Scottish Power.

The energy industry has reacted with scepticism to the plan, saying a price cap could lead to higher prices.

“If you put a cap on prices, you actually stop competition. That’s the danger of price intervention,” Mr Anderson told the BBC’s Today programme.

When companies do not compete as much, that tends to lead to fewer benefits for customers, he said.

He added that if the Conservatives did intervene, it would be better to abolish standard variable tariffs.

‘Taken advantage’

About 800,000 of the poorest pensioners and 1.5 million low-income families with children are on standard variable tariffs, according to Citizens Advice.

These households are paying an average of £141 more a year for a dual fuel gas and electricity bill than if they were on the cheapest deal, it said.

Work and Pensions Secretary Damian Green told ITV that people felt “taken advantage of” by energy firms.

Mr Green told the Peston on Sunday programme: “There will be a lot about energy policy in the manifesto [and] obviously there will be more detail.”

But British Gas parent firm Centrica, and fellow supplier E.On have both said market competition is essential.

And trade association body Energy UK said a cap could risk “billions in investment and jobs”.

Price comparison site said that previous interventions in the energy sector had led to lower switching rates and higher prices.