May denies energy bills cap is from 'Marxist universe'

Around 17million families on standard variable tariffs could benefit by up to £100 a year according to Tory sources

Under the new proposal by the Conservatives, industry regulator Ofgem would set a cap for the default standard variable tariffs.

The cap will apply to 17 million families standard variable tariffs.

Greg Clark, secretary of state for business, energy and industrial strategy, said: "We will act on our commitment to intervene when the energy market fails to treat people in a fair and reasonable manner".

Switching rates are certainly increasing but, as we already know, around two thirds of households are still paying much more than they need to because they have not moved to a cheaper supplier or even a less expensive deal.

The PM said five of the "big six" energy companies had recently raised prices while their profit margins hit "record levels".

But when Labour pledged a freeze in 2013, under then leader Ed Miliband, it was dismissed as a "petty socialist campaign" by then prime minister David Cameron.

Britain's ruling Conservative Party said last month it would cap domestic energy prices if it retained power.

Theresa May's party has pledged to limit the amount energy giants can charge customers for their electricity and gas bills, ahead of the General Election.

Centrica said on Monday that it "did not believe in any form of price regulation" and has put forward alternative solutions, while ScottishPower repeated calls on Tuesday for SVTs to instead be scrapped altogether.

Boris Johnson "Miliband says he will imitate the catastrophic policies of the emperor Diocletian, by imposing a price freeze on energy bills for the 20 months succeeding the election".

It said: "Tackling this broken market so that it works for everyone must be the priority for the next government".

Labour has accused the Tories of hijacking its policy, although business secretary Greg Clark, mindful no doubt that the Tories dismissed Miliband's "Marxist" proposals as "irresponsible and risky", has been attempting to draw a distinction between the two plans.

Mr Clark admitted that he is among the millions who never switch provider because it is a "hassle". However, it suggested companies should have information on customers who have stuck on standard variable tariff for more than three years, to encourage them to offer better deals.

"And very interestingly, in the cabinet, two years ago, Mrs May didn't support this policy and she opposed Ed Miliband's price cap".

However, she said she could not promise that her planned cap would guarantee prices do not go up "year on year" but said it would prevent "sudden and unexpected and significant" jumps in the price of gas and electricity.

The prime minister would not be drawn on whether some cabinet ministers opposed the price cap policy.

She replied: "I don't think any government can ever promise that no bill is going to go up year on year". Josh Hardie, its deputy director general, said: "A major market intervention, such as a price cap, could lead to unintended consequences, for example, dampening consumers' desire to find the best deal on the market and hitting investor confidence".

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