Labour hits out at Conservatives over energy bill cap 'U-turn'

Posted On: 
3rd July 2017

The Government has been accused of another U-turn after the energy regulator set out plans to extend the energy price cap to fewer households than the Conservative manifesto pledge. 

Ofgem set out options for extending the price cap this morning
Credit: 
PA Images

Ofgem raised a proposal that the limit on gas and electricity bills – which already applies to four million households with pre-payment meters – should cover another 2.6 million low-income families who qualify for the Warm Home Discount scheme.

But it appears to fall well short of the Conservative election pledge to extend the cap to 17 million households.

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Shadow Business Secretary Rebecca Long-Bailey accused Theresa May of diluting her commitments.  

“Ofgem's watered down proposals go nowhere near the promise made by the Prime Minister to adopt Labour's principle of a price cap,” she said.

“In the general election, she pledged unequivocally to knock £100 off the bills of 17 million customers but then didn't include the promise in the Queen's Speech.

“After reports that the Prime Minister has been lobbied by senior cabinet members and the big six energy companies to drop the price cap commitment, ministers must tell the British people why they treat fair pricing for energy consumers as such a low priority and if they are going to make yet another U-turn. “

Ofgem had been tasked by Business Secretary Greg Clark with looking at how it could further use its powers to help low-income households after the Government chose against introducing a bill to cap tariffs in last month’s Queen’s Speech.

The Prime Minister’s spokesman today gave a cautious welcome to Ofgem’s announcement – but insisted the possibility of legislation remained on the table.

“As we said at the time of the Queen’s Speech, we were looking at the best way of providing protection for people and that we weren’t ruling anything out – whether it is action by the regulator or legislation. That remains the case today,” the spokesman said.

“Ofgem’s response is a step in the right direction. We’ve said we need a better energy market, we’re committed to extending price protection currently in place for some vulnerable energy consumers to more people on the poorest-value tariffs. But we’re not ruling anything out – whether that is action by the regulator or legislation.”

The Conservatives were accused of hypocrisy when they announced plans for the cap – after David Cameron had said a similar policy proposed by Ed Miliband was something from a “Marxist universe”.

In an interview with the Guardian today, Mr Miliband also questioned the influence of the big energy companies after there was no bill announced in the Queen’s Speech.

“When she [Theresa May] said it, the big companies said, ‘Are you joking?’” said the former Labour leader.

“So now it’s: ‘We’re going to have a consultation and maybe not do it.’ This is not just a U-turn followed by a U-turn, it shows Conservatism is quite beached.”