Theresa May’s bill is a populist move based on suspect notions – but there is little doubt suppliers brought it on themselves
Contain your excitement: a full price cap on energy bills is coming, probably not in time for this winter but for Christmas next year. Most people’s enthusiasm, one suspects, will be determined by whether they’re on a standard variable tariff or have switched to a fixed cut-price deal. The former group should enjoy a saving, although maybe not the full £100 per household per year advertised by Theresa May. Active switchers, on the other hand, may find they will pay more when their current deals expire. What should be easier to agree on, however, is that this policy is riddled with breezy assertions and lazy assumptions.
The first problem is business secretary Greg Clark’s dodgy use of the statistic from the Competition and Markets Authority that consumers were paying £1.4bn more than they would in a truly competitive market. Yes, the figure was in last year’s report. But what Clark fails to mention is that the CMA concluded that a temporary price cap would be the wrong remedy. Four out of five members of its panel thought it would likely produce “worse outcomes for customers in the long run”.