The Conservatives are set to implement an “absolute price cap” on energy retailers in the wake of the general election.
Speaking exclusively to Utility Week last night, business and energy secretary Greg Clark said: “We will get Ofgem to set an absolute cap.”
He added that the Conservative’s energy price cap will take inspiration from the views of Martin Cave, a panel member for the Competition and Markets Authority (CMA) investigation into the sector. Cave, was in the minority in calling for muscular intervention in the market while his peers favoured only limited price regulation for prepayment meter customers.
Clark stated: “We have taken the recommendation from the CMA report which called for a prepayment meter cap, an absolute cap, set by the regulator. They were in two minds as to whether to go beyond that, so we backed the minority opinion.”
The incumbent energy secretary also confirmed that a promised energy cost review will go ahead and that it will likely become a “periodic” assessment into energy policy costs.
Clark said the review will “ensure the UK meets its commitments to reduce emissions but do it in the most cost-effective way for businesses”.
Earlier this week Lord Turner, a former chair of the Committee on Climate Change, was tipped to lead the review.
At the count in his Tunbridge Wells constituency, Clark did not rule out working with Labour, who are set increase their number of MPs to 262, on implementing a price cap and other interventions in the energy market. “We need to see what the final outcome will be before we consider the next steps,” Clark said.
Subsequently, however, the Tories stated that they will not do any deals with their opponents. The party lost its parliamentary majority overnight and is now seeking to form a minority government.
The business and energy secretary did slam the opposition party’s plans to renationalise section of the energy sector, calling it “very costly” and that taxpayers money “could be better spend elsewhere”.