MPs demand energy price cap

Pressure mounts as more than 90 politicians sign letter to PM Theresa May

Pressure for a market-wide energy price cap mounted this weekend, as more than 90 MPs, including 50 of her own party, signed a letter to prime minister Theresa May, calling on her to introduce a price cap for call customers on Standard Variable Tariffs.

The letter, which is set to be sent to the prime minister following the summer recess, was organised by former Conservative whip John Penrose MP, who said on Twitter: “If Ofgem won't grow a spine, there's cross-party support in Parliament to insert one.”

It follows claims last week from Ofgem chief executive Dermot Nolan that legislation would be “the most effective way” to deliver a market-wide price cap. Speaking to the Financial Times, Nolan defended the regulator’s ongoing consultation on the merits of a limited “safeguard tariff” which would extend the price protection currently given to prepayment meter customers to around 2.2m other vulnerable customers. He said wider intervention would have to be a “policy matter for government,” as energy suppliers would have a “substantive appeal route” if the regulator acted without legislation.

The letter, which has been signed by MPs including Iain Duncan Smith, Caroline Spelman and Caroline Flint, says: “We are writing to urge you to extend Ofgem’s proposals of 3 July 2017 by introducing an energy price cap that protects all of the 17 million families currently on expensive Standard Variable Tariff deals, not just the 2 million vulnerable ones. While these proposals are a step in the right direction it is clear we must do more to protect the further 15 million households who continue to be preyed on by the big 6 energy firms.

“As you can see from our signatures below, the idea has substantial cross-party support. It was promised in the three leading party manifestos and a temporary, relative price cap has support from most of the ‘challenger’ energy firms – the insurgents who are challenging the dominance of the ‘Big 6’ incumbents, and providing choice and stronger competition, which benefits consumers.

“We hope you will work with us and Ofgem to stop this Big-6 stitch-up, and pledge to help the millions of households who Ofgem seem set to ignore.”

 

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