Prime Minister Theresa May’s announcement of an energy price cap at the Conservative Party Conference has drawn a mixed reaction, with business groups wary of such a move.
Responding on 4 October, CBI Director-General, Carolyn Fairbairn admitted that markets are not perfect and the UK’s business community recognised the power of effective state intervention. However, in the case of the energy market, Fairbairn said such intervention “misses the mark”. Fairbairn said market-wide price caps were “not the best answer” and that continued action to phase out standard variable tariffs would be a better course of action.
Adam Marshall, Director-General of the British Chambers of Commerce (BCC) claimed businesses would be confused by the Prime Minister’s commitment to free markets alongside her stated intention to intervene in the energy market. Chambers added: “Attention must be paid to avoid unintended consequences that drive up costs to consumers or businesses.”
The Conservative Party’s 2017 general election manifesto pledged to extend an energy price cap to micro-businesses, but no action has been taken on this so far.