Conservative energy price cap to impact investment?

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The Conservative Party is proposing an energy price cap on standard variable tariffs, which most energy users are on, as part of their 2017 election manifesto. Not surprisingly the proposals have caused a major outcry from energy suppliers. The industry trade body Energy UK, was particularly concerned and claims the cap could put billions of pounds worth of investment in energy infrastructure at risk.

Energy UK’s 2017 Manifesto statement states: “Further price regulation at this moment would create huge uncertainty around future government intentions, potentially putting at risk the billions in investment and jobs needed to renew our energy system. Any future regulation should be properly designed so as to minimise the impact on competition and have as clear an exit path as possible.”

Energy expert insight

“While perhaps protecting consumers on the highest standard variable tariffs, a cap on prices for one part of the energy supply system will certainly affect the competitive nature of the market.  This could feed through to the fixed price arrangements being offered and impact the investment decisions being made by energy supply businesses.”

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