May’s Energy Price Controls Savaged By Experts and Her Own Cabinet

Theresa May’s interventionist energy price cap has whacked share prices this morning: Centrica is trading at the lowest level for 15 months. The wonk world is savaging the policy:

Adam Smith Institute: “Freezing energy prices was a very bad idea when Ed Miliband proposed it. Yet two years after the electorate rejected it Theresa May is putting forward the same idea and rebranding it a ‘cap’. The facts on the ground haven’t changed, yet just like workers on boards and the living wage, Red Ed’s Zombie Policies are on the march.”

Institute of Economic Affairs:Introducing a cap on household energy prices would be a clumsy and counterproductive government intervention that could have an adverse effect on the energy market. A cap would likely backfire with companies finding some way around them: either by pushing prices higher now in anticipation of the cap or by increasing their lower prices to offset the cap at the top”

Centre for Policy Studies: “The claim that an energy price cap will save households £100 a year is by no means a guarantee. In fact, an intervention of this kind could be detrimental to competition in the market, meaning that this reform could end up doing more harm than good.”

Taxpayers’ Alliance: “Crude diktats such as this suggest that the government simply doesn’t understand the consequences of these ill-thought-out policies.”

Social Market Foundation: “Energy companies will inevitably recoup the costs of this cap elsewhere, which may mean higher prices for people who have shopped around and switched tariff to get themselves a better deal.”

CBI: “A major market intervention, such as a price cap, could lead to unintended consequences, for example dampening consumers’ desire to find the best deal on the market and hitting investor confidence.”

Market analysts RBC Europe: “This decision by May is clearly as much a political as it is an economic one. This intervention could create a worse deal for customers on average.”

Here were members of Theresa May’s Cabinet attacking Ed Miliband’s price cap in 2015:

Michael Fallon: “We have not seen intervention in industry on a scale like this since the 1970s when they tried to control the price of bread.”

Boris Johnson: “Miliband says he will imitate the catastrophic policies of the emperor Diocletian, by imposing a price freeze on energy bills for the 20 months succeeding the election.”

Don’t buy the Tory spin, this is the same sort of market intervention that caused the Tories to claim PM Miliband would lead Britain into a Venezuelan dystopia… 




Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Dominic Cummings tells Damian Collins:

“You talk of ‘contempt of Parliament’. You seem unaware that most of the country feels contempt for Parliament and this contempt is growing.”

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
7 Cummings Truth Bullets For Brexiter Tory MPs 7 Cummings Truth Bullets For Brexiter Tory MPs
Gallery Guido’s PMQs Sketch Gallery Guido’s PMQs Sketch
Watch: Jon Craig Duped By Daily Mash Watch: Jon Craig Duped By Daily Mash
Boris Tells May: Get On With It Boris Tells May: Get On With It
German Firms Back Brexit Britain German Firms Back Brexit Britain
Zarb Referred to Disputes Panel Zarb Referred to Disputes Panel
Kate Osamor Plagiarised Maiden Speech Kate Osamor Plagiarised Maiden Speech
Ken: Seumas Wrote My Tweets and Never Told Me to Stop Talking About Hitler Ken: Seumas Wrote My Tweets and Never Told Me to Stop Talking About Hitler
Young Voters Now Prefer May to Corbyn Young Voters Now Prefer May to Corbyn
Ruth and Gove Blast “Dour” Tories Ruth and Gove Blast “Dour” Tories
Ken Resigns from Labour Ken Resigns from Labour
New Tory Treasurer is Director of 7 Companies With Overdue Accounts New Tory Treasurer is Director of 7 Companies With Overdue Accounts
All-Remain Peston Show “Kerfuffle” All-Remain Peston Show “Kerfuffle”
Top Tory’s Firm Implicated in Russian Dirty Money Report Top Tory’s Firm Implicated in Russian Dirty Money Report
New Peerages New Peerages
Kate Osamor Plagiarises Barack Obama Speech Kate Osamor Plagiarises Barack Obama Speech
Corbyn’s New Peer Martha Osamor Defended Anti-Semites Corbyn’s New Peer Martha Osamor Defended Anti-Semites
Tower Hamlets Labour Council Bosses Award Themselves Vast Pay Rises Tower Hamlets Labour Council Bosses Award Themselves Vast Pay Rises
Corbyn-Backed Lewisham Candidate Loves Castro and Chavez Corbyn-Backed Lewisham Candidate Loves Castro and Chavez