THE GOVERNMENT has backed out from its radical plans to introduce an energy price cap as the Queen’s Speech confirmed it will only be extending price protections for vulnerable customers.
Theresa May in April vowed to intervene in the “broken” energy market and introduce a cap to knock £100 a year off 17 million people’s energy bills.
But she appears to have performed a U-turn on the flagship proposal as an “absolute cap” on gas and electricity prices was not included in the Queen’s Speech.
Instead the Queen confirmed that the Government will continue to support the “effective” and “efficient” completion of the smart meter roll-out.
The meters, which have already been installed in almost 7 million homes, will be offered to all UK homes and businesses by the end of 2020 – but are not compulsory.
The Government has also committed to extend the price protection, which is already in place for some vulnerable energy customers, to more of those on the poorest value tariffs.
The price cap, which came into force on April 1, is intended to benefit households who prepay for their energy and have a smaller choice of tariffs available to them.
Although many of the four million prepay houselholds saw their bills drop as the result of the policy more than 200,000 customers saw their bills rise, according to MoneySavingExpert.com .
The Queen also confirmed that the Government will publish a green paper that will “closely examine” markets which are not working fairly for consumers.
“My Government will ensure fairer markets for consumers. This will include bringing forward measures to help tackle unfair practices in the energy market to help reduce energy bills,” the Queen said.
Richard Neydegg from price comparison website uSwitch said: “As the Competition and Markets Authority identified last year, increased competition and consumer engagement are the best ways to ensure they do not pay more than they need to for their energy.
He added that uSwitch will continue to work with the Government, regulators, and other organisations to ensure more energy customers access better deal.
“But alongside this, reforms are needed to ensure the most vulnerable are not unfairly treated and that they receive direct and practical support,” he added.
Brendan Flattery, the chief executive of business energy consultancy Utilitywise said the UK energy industry has been waiting for a new Government to set out its long-term vision for the sector and was left “little disappointed”.
What is the Queen's Speech?
THE Queen’s Speech is a flagship event that sets out the Government’s agenda for the next two years.
- Where? The Queen’s Speech takes place at the State Opening of Parliament.
- Who? Written by the PM and his or her colleagues, it outlines the Government’s legislative agenda for the coming year.
The event sees the Queen address the House of Lords before the Commons are invited into the chamber by Black Rod, the Monarch’s envoy in Parliament, to hear the speech. MPs then debate the speech back in the House of Commons. - What? It gives the best marker as to what policies will be pursued most vigorously and what plans will be put on the backburner.
“Smart meters are the technology of yesterday, and by the time the roll-out is complete they will be obsolete. It’s like the last Government investing heavily in Blockbuster as Netflix was on the rise,” he said.
The proposed Government crackdown on energy prices came after all of the ‘big six’ energy firms announced a slew of price changes earlier this year.
In March, E.ON announced it was pushing up prices by almost 14 per cent – adding £97 a year to bills from April 26.
Npower added £109 a year to bills – a rise of 9.8 per cent – from March 16.
Scottish Power pushed up bills by an average of 7.8 per cent – adding £86 a year to bills – from March 31.
The proposed crackdown was widely criticised by the members of the UK energy industry saying it could hinder competition, pushing up energy prices and ultimately leaving British consumers worse off.
Energy caps was not the only measure the PM was forced to scrap in the Queen’s Speech after failing to win a majority in the election.
The speech did also not include information on the hated social care reforms, scrapping free school meals, or information on changes to grammar schools.
US president Donald Trump’s state visit to Britain also seems to have been cancelled after it was not mentioned.
Instead, the Queen’s Speech mainly focused on Brexit and included bills on tackling terrorism, pushing through legislation on our EU exit, and measures to “make the country fairer”.
Theresa May also promised that victims and families of those involved in the Grenfell tower fire will have their legal fees funded.
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