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Westminster Column - Energy Price Cap

The Government has now drafted legislation for an energy price cap to bring an end to rip off energy prices.

This was a manifesto commitment during the election. Far from it being a piece of labour ‘light’ policy, it is a fundamental obligation of those of us who support free markets and capitalism to intervene when the market is not working properly. On electricity prices it is not working properly. All those in favour of free markets should support taking action to fix them when they are broken.

I believe this broken energy market has to be reformed. More than 18 million households throughout UK are currently on unfairly priced tariffs that penalise loyalty.

Wednesday’s announcement by Ofgem to extend the existing price cap is very welcome. But it will not fix the problems in the energy market. That is why the new Bill published on Thursday will allow the regulator to bring in a price cap on the poor value tariffs which have been exploiting the loyalty of their customers.

Figures suggest that this will protect around two thirds of households throughout the Royal Town. The regulator will design the Safeguard Tariff and will be tasked by parliament to set it at a level which still leaves a strong incentive for customers to shop around for the best deal but improves the terrible prices which are being inflicted on some households.

Thursday’s publication of the draft legislation is an important step towards fixing this problem and crucially should offer peace of mind to working families throughout the Royal Town that they are getting a fair deal.

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