Government lacks faith in free market, says energy boss

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Media captionIain Conn, CEO of Centrica defends energy industry on Today after talks of cost cap by Tories

The boss of British Gas owner Centrica has said some people at the heart of the Conservative government “don’t believe in free markets”.

Iain Conn, Centrica’s chief executive, was defending the energy industry after the Tories indicated they planned to include a cap on some household energy bills in their election manifesto.

Centrica shares were hit on Monday by the proposed cost cap.

Mr Conn told the BBC he was “concerned” about the government’s approach.

“I think there are some at the heart of the government who just don’t believe in free markets,” he said.

“in addition to also I find in which concerning at a time when This particular market can be highly competitive in addition to also the UK can be seeking to forge a fresh future relying upon free trade with the rest of the planet.”

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Conservative ministers have said they need to intervene because many households are paying too much for their energy bills.

The manifesto pledge would likely outline plans to cap bills for seven out of 10 households paying standard variable tariffs, which are often criticised as bad deals for consumers by industry watchdogs.

Defence Secretary Sir Michael Fallon said on Monday: “This particular can be a market in which can be not working perfectly in addition to also therefore we are intervening to make markets work better.”

Reports have suggested the Tories could seek to cut gas in addition to also electricity costs by £100 a year for 17 million families.

Analysis: ‘Voicing the suspicions of business chiefs’

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By Dominic O’Connell, Today Programme business presenter

To whom can be Iain Conn referring? Those “at the heart of government who do not believe in free markets”?

This particular can be, on the face of This particular, an extraordinary accusation to make. nevertheless had the Centrica chief executive made the same charge against the first person to propose energy cost caps – Ed Miliband, who came up with the policy when Labour leader – no-one would likely have batted an eyelid.

at This particular point in which the Conservatives have a design of the same plan, Conn can be simply voicing the suspicions of many top business people.

They have traditionally supported the Tories, knowing at least in which the party’s default setting was to let the market run.

at This particular point they are not so sure. Theresa May’s interventions on executive pay, corporate governance in addition to also questioning whether big business can be acting inside the best interests of the UK as a whole has put in which former certainty in question.

Industry scepticism

Speaking to the BBC, Mr Conn conceded in which the energy market was “not working perfectly”.

nevertheless he added: “I just don’t think capping prices can be the right way to help the market in addition to also will probably have unintended consequences.”

The energy industry has reacted with scepticism to the Conservatives’ plan, saying This particular could lead to higher prices.

Shares in Centrica were up about 1% in early trading on Tuesday, having fallen as much as 5% at one point on Monday.

If plans to cut bills by £100 came into force, British Gas “would likely absolutely be losing money”, Mr Conn told the BBC.

Energy providers’ profit margins are thinner than many realise, with British Gas creating about £50 per customer after tax, he added.

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