Tory MP’s warning over cap on energy prices

TORY BACKBENCHERS have demanded reassurance that the Government’s energy price cap will not lead to hikes in prices to around the level of the cap.

Former Minister Sir Desmond Swayne compared the move to the cap on university fees, saying most institutions simply charged the maximum amount they could.

Robert Jenrick, meanwhile, said he was “naturally suspicious of caps, particularly being introduced by a Conservative Government”.

Business Secretary Greg Clark told MPs the Government wanted to create more competition in the market, while protecting those on standard variable tariffs.

Responding to Sir Desmond, he said: “He will know that there is a vigorous market for deals that are available through a lot of new entrants, there is a very vigorous, competitive market there.

“What we want to do is to expand that market.

“The competition authority has established that at the moment there is insufficient competition in the standard variable tariffs.”

Ofgem will bring in a cap on poor-value standard variable or other default tariffs, having effect initially until the end of 2020 but extendable until the end of 2023 at the latest, under the Draft Domestic Gas and Electricity (Tariffs Cap) Bill to help more than 18 million customer accounts in England, Wales and Scotland.

The bill would require Ofgem to consult and impose the cap “as soon as practicable” after the legislation is passed.

The BEIS Select Committee will be asked to scrutinise the draft legislation to help build cross-party consensus on the workings of the cap as proposed in the Prime Minister’s speech last week.