Tory business secretary defends energy price cap plan
We’ll send you a myFT Daily Digest email rounding up the latest UK politics & policy news every morning.
Greg Clark, the business secretary, has rejected claims of hypocrisy after setting out plans to cap the energy bills of 17m households to curb what he called “abusive” behaviour by the Big Six providers.
The energy cap will be a key “retail offer” in the Conservative election manifesto, to be published next week.
But it is almost identical to a Labour policy from 2015 which was – at the time – slammed by the Tories as a quasi-Marxist state intervention.
Under the plans, there will be a cap on the cost of a standard variable tariffs, the default deals that are used by two-thirds of households in Britain.
The major intervention has been trailed for six months since Theresa May spoke out against the Big Six energy companies during her first speech to the Conservative conference as prime minister.
Under the specific proposals, reported by the FT two weeks ago, the cap would be set by Ofgem, the energy regulator.
That would follow the precedent set earlier this year when a cap was imposed on the 4m households with prepayment meters.
Mr Clark said that the Competition and Markets Authority had found that the market was not sufficient competitive.
“The overcharging they estimated was running at about £1.4bn a year,” he told the BBC Radio 4’s Today programme. “The additional cost to consumers has varied from £70 too about £200.”
Five out of six of the biggest providers have put up bills this year by up to 10 per cent.
The move, which could knock up to £100 of the typical energy bill, is intended to make the Tories more appealing to “just about managing” families on low incomes.
But it is not universally popular among Conservative MPs, with some believing that it represents heavy-handed interference in markets with potential unintended consequences.
Get alerts on when a new story is published