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IEA - Energy price cap will not guarantee lower bills

Reaction to Conservative Party pledge to introduce cap on household energy bills

Commenting on the Conservative Party’s pledge to introduce a price cap on household energy if they win the general election, Mark Littlewood, Director General at the Institute of Economic Affairs, said:

“This type of cap is a crude intervention which will not guarantee lower bills for consumers. The move may well end up backfiring with energy companies likely to raise prices before the cap is introduced. Poorly justified political meddling will also deter new entrants, undermine competition, reduce much needed investment in the industry, and potentially put jobs at risk.

“Across Europe, price controls have failed wherever they have been introduced. There is no reason to think politicians know any better this time around. In reality a cap will do more harm than good for consumers and businesses alike.”

Notes to editors:

For media enquiries please contact Nerissa Chesterfield, Communications Officer: nchesterfield@iea.org.uk 020 7799 8920 or 07791 390 268.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.

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