Lord Lawson Says Energy Price Cap Is ‘Crazy’

  • Date: 09/05/17
  • BBC News

Theresa May has vowed to end the “injustice” of rising energy costs by promising a cap on standard variable tariffs in the Tory election manifesto. Former Conservative chancellor Lord Lawson says the idea is “crazy” and the government should concentrate on reducing bills by sourcing more energy from the cheapest and most reliable technologies.

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”.

And the SNP described the proposal as an “election bribe”.

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.”

Mrs May suggested the move could save about 17 million customers up to £100 a year. Seven out of 10 households are on these rates. […]

Analysis by Laura Kuenssberg, political editor

I understand ministers had not originally intended to go ahead with a full cap when the PM first gave her hint in the autumn. There was an element of wait and see.

One minister told me they hoped that they had put the firms on notice, and they would only crack on with a full cap if the “big six” continued with price rises.

That is, of course, precisely what happened.

Perhaps the energy firms even put up some bills in anticipation of the government acting. (Chicken and egg, would they have put up bills without the threat of a cap to keep bills down?)

In any case, the prime minister is pressing ahead with a policy that’s more or less out of Labour’s 2015 playbook that the Tories hope will appeal to voters across the board, even though it will rankle with some of their true believers.

The BBC understands there was some opposition in the cabinet to the proposal, which the Conservatives intended to legislate on if they win the election to remove any potential legal uncertainty.

Former Conservative chancellor Lord Lawson has said the idea is “crazy” and the government should concentrate on reducing bills by sourcing more energy from the cheapest and most reliable technologies.

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