Conservatives promise cap on energy prices

With prices rising significantly over the past year, politicians and industry have come under mounting pressure to help the two-thirds of homes on energy suppliers' expensive standard variable tariffs.

Speaking on ITV's Peston on Sunday yesterday (see the full video below), Work and Pensions Secretary Damian Green said that if re-elected on 8 June, the Conservatives would "have [regulator] Ofgem setting a limit, so it would be a cap, so it would be more flexible".

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'Intervening to make markets work better'

The Conservatives' general election manifesto hasn't yet been published - and won't be until sometime next month - so we don't yet know much about how the price cap would work, and the policy isn't set in stone.

But other senior Conservatives have also reportedly backed Mr Green's comments this weekend, with Defence Secretary Michael Fallon telling the BBC: "This is a market that is not working perfectly and therefore we are intervening to make markets work better."

It comes after MPs last month backed the idea of a relative price cap, which would impose a maximum difference between a provider's best deal and its most expensive one, though other models of price cap could also be considered. In March, Prime Minister Theresa May also vowed to announce a crackdown on sky-high energy prices "very soon".

However MoneySavingExpert.com founder Martin Lewis has opposed the idea of capping energy prices, and in February wrote to The Times newspaper warning it would give customers "the worst of both worlds" as "some will still overpay, but many firms won't be able to offer really cheap prices".

The Conservatives' apparent enthusiasm for capping energy prices has been met with incredulity by former Labour leader Ed Miliband, who announced a similar policy in 2015.

Mr Miliband tweeted: "Where were these people for last 4 years since I proposed cap? Defending a broken energy market that ripped people off. Let's see small print."