Energy cap creates ‘false sense of security’, warns award-winning CEO

An award-winning North West energy company has warned Prime Minister Theresa May that the Government’s planned energy cap risks lulling consumers into a “false sense of security”.

Phil Foster, managing director of Bolton-based Love Energy Savings, the UK’s largest business energy switching service, which has saved customers more than £70.5 million on their electricity and gas bills, said the cap would not protect the majority of businesses, especially SMEs, from rising energy prices this winter.

He called on the Government to instead propose a robust energy strategy to address the major underlying causes of rising energy bills for UK businesses.

“With five of the ‘Big Six’ energy companies having already increased their prices this year, a price cap may fail to address the fact that many consumers are already paying too much for their electricity and gas,” he said. “It also generates something of a false sense of security for consumers, who assume they will be protected by the price cap from paying too much rather than shopping around for a better tariff.

“The focus on a price cap as a vote-winning soundbite is drawing critical attention away from the real issue, which is a lack of a robust Government energy policy going forward. With our winter power generating capacity margin again set to fall to worryingly low levels, focusing on a price cap that in reality offers little real benefit to consumers means we are not addressing the key issues around our security of supply.

“With investment rapidly falling for renewable energy, ongoing uncertainty over the timescales and costs for Hinkley Point, and increasingly uncertain gas supply, a properly laid out and effective energy policy for the country is far more important than a price cap in terms of avoiding future price rises.

“This lack of clarity in recent years means that should we experience unexpected outages during the winter months, or we have a particularly cold winter, prices could climb significantly. As things are, we would be forced to rely on potentially expensive imported gas from Europe or to pay power stations to stand by in case they are called on to make up any shortfall in supply.”