UK energy firms say planned Tory price cap will harm investment, jobs

The UK energy industry came out swinging on Friday as it attacked Conservative Party plans to introduce price caps.

Publishing its manifesto for the upcoming June General Election, industry lobby group Energy UK said price regulation “would create huge uncertainty around future government intentions” and potentially put billions of pounds in investment and jobs at risk.

“Any future regulation should be properly designed so as to minimise the impact on competition and have as clear an exit path as possible,” the body said in its report.

“Free markets deliver innovation in a way that highly regulated markets simply cannot. Energy UK continues to believe that we must allow competition to drive innovation and benefits for consumers while ensuring that there is targeted support for those most in need.”

Shares in major energy suppliers fell earlier this week after the Conservative Party said it would pledge to cap prices as consumers faced double-digit percentage increases in their bills.

Energy UK represent's the 'big six' energy suppliers, British Gas, EDF, E.ON, Npower, SSE, ScottishPower, as well as other smaller firms in the sector.

Labour said the idea should be taken "with a pinch of salt". Former party leader Ed Miliband proposed a 20 month freeze on domestic energy bills ahead of the 2015 election, which he lost to David Cameron. The Conservatives at the time dismissed the plan as a "sleight of hand".

Iain Conn, the chief executive of British Gas parent company Centrica was scathing of the plan.

“I think there are some at the heart of the government who just don't believe in free markets," he told the BBC this week.

"And I find that concerning at a time when this market is highly competitive and the UK is seeking to forge a new future relying upon free trade with the rest of the world."