Energy firms’ price cap ‘stitch-up’

THE Big Six energy firms were accused of a ‘stitch-up’ last night after they escaped the full effect of Theresa May’s promised price cap.

The Prime Minister pledged before the general election to impose an upper limit on bills, which would have seen them fall by up to £100 a year for 17million households.

But yesterday Ofgem brought forward plans which would see only .6million vulnerable consumers benefiting. The energy regulator suggested a ‘safeguard tariff’ for these consumers, who receive a benefit called the Warm Homes Discount. A safeguard tariff is a cap on the cost of gas and electricity for those deemed at financial risk.

The price cap pledge – a centrepiece of the doomed Tory manifesto – was missing from last month’s Queen’s Speech. Instead, Business Secretary Greg Clark simply wrote to Ofgem requesting that it draw up proposals.

Tory MP John Penrose, who had campaigned for a cap, said the Ofgem plan was a ‘stitch-up’ by the largest suppliers that would see energy bills rise for 14 million customers. He described Ofgem’s proposals as a ‘great betrayal of those 14 million households’.

Labour accused Mrs May of a U-turn because she still has not published legislation to impose a wider price cap.

Mr Clark said Ofgem’s idea was an ‘initial proposal’ and a ‘step in the right direction’, but added that he was ‘prepared to legislate’ if the Ofgem changes did not do enough to cut customers’ bills.

Ofgem said the safeguard tariff was one of a number of options it is mulling over.