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It would be “very dangerous” to place a temporary price cap on all energy tariffs, the chair of the Competition and Markets Authority’s energy market probe has warned.
During its investigation, the Competition and Markets Authority (CMA) panel discussed a temporary price cap after comments from panellist Martin Cave, who argued that a transitional price cap for prepayment customers would not reduce overcharging.
Cave said a price cap applying to all standard tariffs was required to address the scale of detriment in the short-term.
However, chair of the investigation Roger Witcomb told Utility Week: “Martin thinks that you can put on a temporary price cap and when you take it off, everything will be lovely, we thought that was very dangerous.
“We talked about it and looked very hard to see whether we could widen the net of a price cap and decided there wasn’t any way of doing that.”
Witcomb added that the majority of panellists believed “there wasn’t any such thing as a temporary price cap. There was either a price cap or not.”
The final remedies from the CMA report, published in June, included a transitional price cap for prepayment meter customers, to be put in place until smart meters were rolled out in 2020.
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