Price Cap on Energy Bills Set to Be Promised by Theresa May

The Manifesto of the Conservatives looks likely to include a plan to cap energy bills. Prime Minister Theresa May confirmed that the government will be fencing the tariff rates on energy. This will help in curbing unprecedented rise in rates post Brexit. The Conservatives estimate 100 pounds can be saved by households on energy bills with the new plan.

Theresa MayTheresa May

The policy is a diluted version of the energy price cap announced in 2015 by Ed Miliband. The PM stated that she is introducing the policy to “step in when markets aren’t working, or take action when people are being taken advantage of.” It looks set to be a roller coaster ride for the UK. Negotiations with the EU on trade deals and single market access are proving tricky.

An Appeasement Attempt

 

The Lib Dems did not find anything credible with the new plan. They state that it is “never a good idea to copy the economic strategy of Ed Miliband.” The Labour party had a similar but tougher view of the policy, calling it “desperate stuff.” Before the 2015 General Elections, Labour leader Miliband suggested a freeze on the energy prices till the energy market was reorganised. The energy prices are supposed to stay stagnant for at least two years.

May wrote for The Sun, stating, “It is clear to me that the energy market is not working for ordinary working families. Too many people simply aren’t getting a fair deal.” The retaliation to the statement was quick but the Conservative defense was even quicker. They stated that the policies may look similar but are quite different.

Whilst Miliband suggests freezing tariff rates, the May suggestion is to fence the rate at which prices rise. Of course, the Conservatives find it better and more progressive than the Miliband suggestion. However, they also pointed to a similar tariff rate hike limit policy by Labor, calling it ‘Venezuelan style’ price control.

What Does the Policy Include?

 

May wrote that she will be putting caps at the energy tariff so that households don’t get exploited by variable rates. She said that 17 million households could be benefited from this move. Shadow business and energy secretary of the Labour party, Rebecca Long-Bailey said that the Tories were using desperate measures. She said that putting caps on the tariffs does not guarantee that rates will not rise next year. She also criticized the Tories for not divulging a clear plan or commitment in cutting down energy costs for the households.