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09.10.2017 15:58

UK energy price cap legislation to be published on Thursday

AUTHOR: publics.bg

© Ofgem

Draft legislation on the British government’s plans to cap energy prices will be published on Thursday, a spokesman for Prime Minister Theresa May said on Monday.

Last week, May said she would impose a price cap on the energy market to help millions of households struggling with rising prices, hitting shares in the leading providers hard reports Reuters.

An energy price cap designed to end expensive tariffs could actually end up increasing bills, experts say. The new cap will reduce the cost of the most expensive tariffs, paid by loyal customers, but will dampen competition and could put the smaller firms that offer the cheapest deals out of business.

The purpose of the cap is to put an end to excessive prices customers pay, namely standard variable tariffs, which are the most expensive. It is expected to save around 12 million customers £100 a year The Telegraph announced.

“While we are in favour of free markets we will always take action to fix them when they are broken, we will always take on monopolies and vested interests when they are holding people back,” May told the Conservative Party’s annual conference, Reuters informed last week.

A standard variable tariff is a supply contract with an indefinite length that does not have a fixed-term applying to the terms and conditions. It’s an energy supplier’s basic offer. If a customer does not choose a specific energy plan, for example after their fixed tariff ends, they are moved to an SVT until they choose a new one.