British PM May vows energy price cap if re-elected

British PM May vows energy price cap if re-elected

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LONDON (TIP): British Prime Minister Theresa May
 vowed on May 9 to introduce a cap on domestic energy prices that would 
cut tariffs for around 17 million families if she is re-elected on June 

Energy bills have doubled in 
Britain over the past decade to about 1,200 pounds ($1,553.40) a year, 
angering consumers who face rising inflation and muted wage growth, and 
drawing the ire of politicians ahead of the national election.

According to the Sun newspaper, May will
 order the energy regulator Ofgem to cap the maximum costs of 
standard variable tariffs, the package used by two thirds of customers 
in Britain.

May, whose ruling Conservative Party is 
around 20 points ahead of the opposition Labour Party in opinion polls, 
said she expected the move to save families on poor value tariffs as 
much as 100 pounds a year.

“It will protect around 17 
million families on standard variable tariffs from being exploited with 
sudden and unjustified increases in bills,” May wrote in the Sun.

Share prices in Centrica, which 
owns household energy supplier British Gas, and SSE, have fallen this 
year since the ruling Conservative Party indicated its intention to set a
 price cap. Centrica shares are down 14 percent.

Centrica Chief Executive Iain Conn said 
last month that May’s plan to cap energy prices suggests some in 
her government do not believe in free markets at a time when it is 
pinning its post-Brexit hopes on free trade.

May last year praised free markets 
and free trade in a speech to party activists but also said that she 
would be prepared to intervene where markets were dysfunctional or where
 companies were exploiting the failures of the market.

May’s government has previously called 
for more competition in a sector dominated by the big six providers 
of Centrica, SSE, Scottish Power, Npower, E.ON and EDF.

The energy industry has argued that 
a price cap will wipe out competition and force companies to increase 
the cost of their lowest tariffs.

The policy echoes a pledge made by 
the opposition Labour party ahead of the 2015 election. Their plans for a
 cap on price hikes were lambasted at the time by the Conservatives who 
accused the then Labour leader Ed Miliband of wanting to live in a 
“Marxist universe”. (Reuters)


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