Theresa May announces plans for energy bill cap

Image credit: Amer Ghazzal / Demotix/Demotix/Press Association Images

The UK energy regulator will be given new powers to cap energy bills, under plans announced by Theresa May at the Conservative Party conference.

Between disruption caused by a comedian invading the stage and a prolonged coughing fit, the Prime Minister used her speech to revive plans contained in the Conservative manifesto to cap prices for 12 million consumers, warning that the current system “punishes loyalty with higher prices”.

Under the plans, which will be released in a draft bill next week, customers on standard variable tariffs are expected to see bills capped, though party sources said it would be up to Ofgem to determine the level of the cap.

Kate Morrison, energy policy manager at Citizens Advice Scotland’s Consumers Futures Unit, welcomed the plans.

She said: “It's no great surprise that the UK Government has felt the need to intervene in the energy market. Trust in the market is low and prices have continued to rise with a lack of transparency.

“This is a particular issue for Scottish consumers, given our cold wet climate and high fuel poverty rates. We would welcome any action that makes bills more affordable.”

Launching their manifesto in May, the Tories were forced to reject accusations the energy cap was the same as one proposed by Ed Miliband during his time as Labour leader.

Speaking in Manchester today, May said: “The most loyal customers are often those with lower incomes: the elderly, people with lower qualifications and people who rent their homes. Those who, for whatever reason, are unable to find the time to shop around.

“That's why next week this government will publish a draft bill to put a price cap on energy bills. Meeting our manifesto promise, and bringing an end to rip-off energy prices once and for all.”

A spokesman for Scottish and Southern Energy said: “SSE believes in competition not caps, so if there is to be any intervention it should be simple to administer, time-limited, and maintain the principles of a competitive energy market to best serve customers’ interests.”