Britain's Business secretary says energy market is inefficient

May to Introduce Energy Price Cap if Reelected

"In recent months we have seen five of the Big Six energy firms announce yet more price rises for standard tariffs - while analysis shows profit margins hitting record levels".

United Kingdom's Prime Minister will introduce a cap on "unfair energy price rises" if she is re-elected on June 8, Theresa May wrote in the Sun newspaper on Monday.

"Too many people simply aren't getting a fair deal", she says.

Britain's competition body in 2016 ordered suppliers to cap prices for customers on prepayment meters but the latest plan by May's Conservatives would mark the first time since privatisation of the industry in 1990 that a government intervenes to cap prices across the market.

The Conservative leader vowed to place a cap on standard variable tariffs to remove the "injustice" of soaring energy costs.

Yes. In 2013 then Labour leader Ed Miliband said his party would freeze gas and electricity bills for every home and business in the United Kingdom for 20 months if it won the 2015 election.

But it is nearly identical to a Labour policy from 2015 which was - at the time - slammed by the Tories as a quasi-Marxist state intervention.

According to a Government-backed study, customers have been forced to pay £1.4bn a year in "excessive prices", but the CMA stopped short of imposing a cap for fear of stifling the competition.

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"Administering the price cap therefore risks being tantamount to signing off bill increases for the industry", said Cornwall Energy.

"The energy market is working better than many people give it credit for".

SSE said the market was competitive, dynamic and fast changing, while Scottish Power said May's party had come to the wrong conclusion and that standard tariffs should be scrapped altogether. They raise the prospect of prices across the board tending to be closer to the Ofgem-set cap, thereby reducing the incentive for consumers to switch.

Theresa May has decided that an energy cap fits her political objective and has confirmed she will wear it into this election campaign.

Shadow Business Secretary Rebecca Long-Bailey added: "When the Tories say they'll "cap" bills, the question they need to answer is whether they can guarantee bills won't go up for people next year - that's the real test". That would imply that if wholesale prices continue creeping up, as they have in Ofgem's cost supplier index, bills will go up despite the cap.

"The CMA's thorough two-year investigation identified low levels of consumers switching energy providers as a challenge, and put forward a range of recommendations to address this", said CBI deputy director general Josh Hardie.

Even consumer groups are anxious that consumers will become less bothered trying to find a good deal if they think the government is doing it for them.

Iain Conn, the chief executive of British Gas owner Centrica, which saw its share price slide 1.58% on Tuesday after the policy was confirmed, suggested there might yet be some sops for the industry when the final detail was revealed.

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