General election 2017: PM vows to end ‘rip-off’ energy bills

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British Gas

Theresa May has vowed to end the “injustice” of rising energy costs by including a cap in the Conservative general election manifesto.

The PM said the energy market “is not working”, with vulnerable people worst hit by “rip-off” bills.

Industry figures have criticised the plan, first announced last month, saying it could lead to higher prices.

Labour, which offered its own bill cap ahead of the 2015 election, accused the Tories of “desperate stuff”.

It challenged the Tories to guarantee bills would not rise next year under a Conservative government.

Under the Conservative proposal, industry watchdog Ofgem would set a cap for the default standard variable tariffs, which are often criticised as bad deals for consumers by industry watchdogs.

“Like millions of working families, I am fed up with rip-off energy prices,” Mrs May wrote in The Sun.

“Gas and electricity bills only ever seem to go in one direction, eating up more and more of your monthly pay packet.”

The PM said five of the “big six” energy companies had recently raised prices while their profit margins hit “record levels”.

‘Re-announcing’

She added: “And it is the vulnerable, and those on low incomes, who are being hit hardest.

“It is clear to me that the energy market is not working for ordinary working families. Too many people simply aren’t getting a fair deal.”

British Gas owner Centrica said it did not believe in “any form of price regulation”.

In a trading update, the firm said: “Evidence from other countries would suggest this will lead to reduced competition and choice, and potentially higher average prices.”

According to Citizens Advice, about 800,000 of the poorest pensioners and 1.5 million low-income families with children are on standard variable tariffs.

These households are paying an average of £141 more a year for a dual fuel gas and electricity bill than if they were on the cheapest deal, it said.

Last year, the Competition and Markets Authority recommended a cap on pre-paid energy bills – a measure that was introduced last month – but decided that to extend this to all standard variable customers would “run excessive risks of undermining the competitive process – notably by reducing the incentives of customers to engage and increasing regulatory risk – likely resulting in worse outcomes for customers in the long run”.

Under former leader Ed Miliband, Labour went into the 2015 general election promising to freeze energy bills, saying they would be able to fall but not rise.

Responding to the Tories’ latest comments, shadow chief secretary to the Treasury Rebecca Long-Bailey said: “This is desperate stuff from the Tories, re-announcing something they tried to get a headline for just a fortnight ago. But just as when they announced it last time, there’s still no proper detail nor any real commitment to helping working people.

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“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. A cap suggests a maximum amount that can be charged, not a promise that bills won’t go up year on year.”

Lib Dem former energy secretary Ed Davey said: “It is never a good idea to copy the economic strategy of Ed Miliband. As the Conservatives pointed out at the time, this will damage investment in energy when it is needed more than ever.”

The main parties have yet to publish their full manifestos ahead of the 8 June general election.

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