Conservative members unimpressed by price cap pledge

Grassroots opinion echoes hostile reaction among right wing think tanks

Conservative grassroots members are lukewarm about Theresa May’s flagship policy of capping energy bills, a survey has revealed.

The website Conservative Home has polled Conservative members on the priorities that the party should adopt if it is elected back into government following 8 June’s general election.

The poll identified the energy price cap, which the prime minister confirmed would feature in the Conservative manifesto earlier this week, as a low priority amongst grassroots Tories.

On a one to ten rating, where 10 is highest priority, they gave the policy an average score of three to four, putting it in the “very bottom”. bracket, according to Conservative Home.

The grassroots’ lack of enthusiasm for the policy is reflected by the hostile reaction to May’s announcement from right wing thinktanks.

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.”

Sam Dumitriu, head of projects at the Adam Smith Institute said that the proposed cap would backfire.

“When Ed Miliband called for 70s style price controls on energy prices in 2013 the Tories were right to oppose it. The facts haven’t changed since then, only the politics. We said back then that proposing a cap would force energy companies to keep prices high even as wholesale prices fell as a precaution – and, with the price cap on the table since then, that’s exactly what’s happened. Since Theresa May floated resurrecting Red Ed’s price cap, energy companies have hiked prices by as much as 40 per cent in anticipation of a cap.”

Warning the mooted cap would destroy the incentive for customers to shop around for cheaper tariffs, he said: “Ultimately expensive bills are caused by high wholesale prices and bad regulation, not profiteering – energy firms are no more profitable than similarly sized companies in other sectors. If the prime minister really wants to cut energy bills, she should go for competition and make switching easier and more attractive for billpayers.”

Defending the price cap when questioned by workers in Leeds following Tuesday’s announcement on Tuesday, May acknowledged criticisms that the policy did not fit with the traditional Conservative free market-style solutions.

She said she believed that the government should be acting to curb what she described as “rip off” energy bills.

“I suspect there are many people here who get fed up with the way that energy prices keep on rising and yet the energy companies seem to make more and more profits.”

“Sometimes people say to me that doing something like that doesn’t sound very Conservative. My response to that is when it comes to looking at supporting working people what matters is not an ideology, what matters is doing what you believe to be right and I think something like that could make a real difference to people and a real difference to people’s lives.”