Theresa May accused of humiliating climbdown after watering down plans to slap cap on gas and electricity bills
Big 6 energy giants said they were “pleased” as the government only committed to consult on proposals
THERESA MAY was accused of a humiliating climb down today after watering down plans to slap a price cap on energy bills for 17 million households.
MPs and watchdogs tore into the PM after the Queen’s Speech revealed the government would instead ask regulators to ‘consult’ on how to extend price protection currently in place for some vulnerable consumers.
Energy execs said they were “pleased” and analysts said any action on gas and electricity prices may now not happen until 2020 at the earliest.
Shares in British Gas owner Centrica rose 2 per cent.
Government sources insisted the PM’s “aim” was still to introduce a cap to tackle a £1.4 billion industry rip-off - and the threat of legislation at some point still remained.
But one industry source said: “It appears to be dead in the water.”
Just last month, the PM vowed to take the unprecedented step of introducing an “absolute price cap” to slash £100 off the bills of 17 million households stuck on standard variable tariffs.
Tory sources at the time insisted the Government would ask regulator Ofgem to introduce a maximum price if the PM was re-elected.
But challenged in the Commons today, the PM dodged questions about a cap and said: “We want to ensure we get the best measure in place”.
The Sun last week revealed the PM was preparing to water down her radical plans under pressure from Chancellor Philip Hammond – who is worried about going to war with business.
And the Queen’s Speech said a new Consumer Market bill would only “consider” the best way of “extending” this price protection to “more of those on the poorest value tariffs”.
Former Labour Shadow Energy Secretary Caroline Flint said: “It now seems Theresa May’s energy price cap has bitten the dust.
“The Queen’s Speech has no mention of a price cap, no promise of legislation, only measures to ‘help reduce energy bills’.
“This sounds like the Government backsliding – passing the problem back to Ofgem – a long way short of the decisive action they were promising.”
Ofgem introduced a cap on pre-payment rates last year – after a formal recommendation from competition watchdogs.
But experts last night claimed the regulator would be unable to introduce wider price controls without primary legislation being passed by Ministers because of the threat of legal challenges.
Richard Lloyd, the former head of consumer watchdog Which? said: “This is a major climb down by a Prime Minister who repeatedly said she would make a price cap happen.
“Now the buck has been passed of Ofgem, meaning many months of delay and the likelihood of a legal challenge about whether they can even do this without legislation.”
Lib Dem chief Tim Farron stormed: “This is a humiliating climb down from a Prime Minister who is on borrowed time.
“The government, for all their talk, has betrayed the just about managing by failing to deliver on their promises.”
Business Secretary Greg Clark wrote to Ofgem chief Dermot Nolan today – asking him to take immediate action to review what can be done to “address the problems in the market that we now see”.