CAP ON HOUSEHOLD ENERGY BILLS SET TO BE INCLUDED IN CONSERVATIVE MANIFESTO

A cap on household energy bills is set to be included in the Conservative manifesto, a cabinet minister has said.

According to the Sunday Times the plans could cut gas and electricity costs by £100 a year for 17 million families. Work and Pensions Secretary Damian Green told ITV people felt “taken advantage of” by energy firms.

Labour said the plan should be taken with “a pinch of salt”, while price comparison company uSwitch said it would “do more harm than good”.

The wider energy industry has reacted with scepticism to the plan, saying a price cap could have a negative impact on competition and lead to higher prices.

The manifesto pledge would outline plans to cap bills for seven out of 10 households paying standard variable tariffs, which are often criticised as bad deals for consumers by industry watchdogs.

It follows the introduction of a cap for households using pre-payment meters early this month, after the Competition and Markets Authority released a report saying customers were overpaying by £1.4bn.

Mr Green told the Peston on Sunday programme: “There will be a lot about energy policy in the manifesto [and] obviously there will be more detail.

“But… I think that people feel that some of the big energy companies have taken advantage of them with the tariffs they have got.”

Mr Green said his party’s promise on energy was not the same as Labour’s 2015 election pledge to freeze gas and electricity bills for every home and business in the UK for 20 months.

“We would have [energy regulator] Ofgem setting the limits,” he said. “So it would be a cap, it would be more flexible, it would be able to reflect market conditions [and] the market would still have an influence.

“That would mean in practical terms that if the oil price fell again, then consumers would benefit, which they wouldn’t have done under [former Labour leader] Ed Miliband’s proposal.”

Mr Miliband responded on Twitter saying: “Where were these people for [the] last four years since I proposed [a] cap?” he wrote. “Defending a broken energy market that ripped people off. Let’s see [the] small print.”