A gas in addition to also electricity cost cap could be imposed as early as This specific winter, Energy Minister Greg Clark has said.
He told the BBC of which the regulator, Ofgem, would certainly receive legal backing through parliament for action on prices.
Asked if This specific could mean action This specific winter, he replied: “Precisely. of which’s exactly why I’m keen of which Ofgem makes use of their powers.”
nevertheless the boss of British Gas-owner Centrica, Iain Conn, warned of which cost caps could mean the end of cheap deals.
On Wednesday, Prime Minister Theresa May revived plans to cap prices, something of which was promised inside the Conservative’s election manifesto nevertheless was absent through June’s Queen’s Speech.
Her statement was followed by sharp falls in energy company share prices. nevertheless Thursday trading saw a partial recovery, with most up by 1% or more.
Mr Clark told the BBC’s Today programme: “If they [Ofgem] need legal back-up there is actually a strong consensus in parliament due to This specific, so we will publish legislation in addition to also we’ll invite the whole House to endorse This specific to ensure they contain the legal certainty.”
The full details will be published in a draft Parliamentary bill next week.
Some 12 million people are on energy companies’ Standard Variable Tariffs (SVTs). These tariffs are typically the most expensive.
SVTs are already falling through favour with energy suppliers. E.On has said the idea will phase out standard variable tariffs through next year in addition to also Centrica’s Iain Conn agreed they should be abolished.
The Competition in addition to also Markets Authority has said consumers have been collectively overcharged £1.4bn by energy providers, a figure disputed by Mr Conn, who said the figure was equivalent to the industry’s entire profit so the idea was not possible for companies to have overcharged by such a sum.
Mr Conn also argued the cost cap plan would certainly not be best for consumers, as there was “clear evidence” they did not work.
He told the BBC: “In brand-new Zealand, in Spain, in California in addition to also in Ontario they tend to limit choice, reduce competition in addition to also prices tend to bunch around the cap.”
This specific had also been noticeable in This specific country, he said: “We’ve seen This specific This specific year inside the UK with the brand-new pre-payment meter cap where most prices are within £2 of each additional.”
Mr Conn accepted the market needed to change, in addition to also acknowledged the industry itself should accept an element of blame for the way the market had evolved.
cost cap: How the idea will work
- the idea will affect 12 million consumers on SVTs
- On average, the idea should save those consumers £100 a year
- the idea will be set, in addition to also reviewed regularly, by Ofgem
- the idea will be temporary
- the idea may not come into effect until the winter of 2018-19
Targeted cap needed?
Many inside the industry were critical of Theresa May’s announcement on Wednesday, arguing of which a cost cap risked stifling competition.
“Over three million consumers have switched already This specific year in addition to also the number of standard tariffs have fallen by almost a million inside the last six months,” said Lawrence Slade, Energy UK chief executive.
The boss of a fuel poverty charity told the BBC of which a broad energy cost cap would certainly not help vulnerable consumers.
Jenny Saunders, chief executive of National Energy Action, told the BBC’s Wake up to Money Podcast: “We’ve been advocating a rather more focused cap, not a general cap on all standard variable rate customers because we recognise there are particular problems for very vulnerable households – people on the lowest incomes.
“We’re not advocating a full cap across the board, target the idea to those who need the idea, people who are rationing their energy use, who are going to go cold This specific winter.
“The cost of doing This specific will be smeared right across the customer base so if we’re going to reduce the cost across the board for standard variable tariffs the idea will go up for additional customers who are on fixed-rate tariffs, in addition to also we’ve been encouraging a lot of people to go onto fixed rates.”