No useful lessons can be drawn from other countries’ experience of implementing price caps, Claire Perry has told the House of Commons.
The minister of state for energy and climate change was quizzed last week on the government’s price cap legislation by Mark Menzies, a Conservative backbench MP.
Menzies, who represents the Lancashire constituency of Fylde, asked business secretary of state Greg Clark if his department had assessed the impact of the introduction of energy price caps in Canada, the US, Spain and New Zealand.
Critics of the government’s price cap plans have pointed to overseas experience for proof that the introduction of such measures in the UK is ultimately counterproductive.
In a written answer on Clark’s behalf, published last week, Perry replied to Menzies that while the government had assessed other countries’ energy policies, it was not relevant due to the liberalised nature of the UK market.
She said: “In those countries where there were, or had been, price interventions in the energy sector markets were either not previously liberalised or had only recently been liberalised.
“This is very different to the situation in Great Britain, and so no useful comparisons can be drawn on the effect on employment and investment in those countries.”
In a separate response, Perry told Menzies the government’s decision not to allow energy suppliers the right to an appeal to the Competition and Markets Authority complies with the law.
In the energy price caps bill, which received its first parliamentary reading last week, the government said judicial review is the only legal recourse open to companies unhappy with the level of the price cap set by Ofgem.
Perry said: “The government believes that a court is capable of considering these matters. Government bills are drafted by the Office of the Parliamentary Counsel based on instructions from government lawyers. We are content that the provisions set out in the draft bill are compliant with the law.”