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City AM: Former Minister John Penrose is to lead calls for a new cap on energy price increases...

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A former Conservative minister is to lead cross-party calls for a new intervention into the UK's energy market, demanding fresh restrictions on pricing.

Ex-cabinet office minister John Penrose will next week tell the government to create a new “relative price cap” to limit suppliers ability to hike bills.

In a backbench debate in the House of Commons on Thursday, Penrose will say that energy watchdog Ofgem should be able to set a maximum increase for out-of-contract energy customers on default tariffs.

He will be joined in the call for action by Labour MP Caroline Flint and SNP MP Patricia Gibson, and more than 50 MPs are known to have back the trio's motion.

Prime Minister Theresa May has previously cited the energy sector as an area ripe for government intervention, and last June the Competition and Markets Authority recommended a cap on for pre-paid energy customers, although one panel member publicly dissented against the decision not to install more widespread limits.

The Department of Business, Energy and Industrial Strategy is expected to respond to the CMA's report on energy markets within weeks.

Asked if an energy price cap was under consideration, a Beis spokesperson said: “We expect energy companies to treat their customers fairly and continue to be concerned by these price rises which will hit millions of people already paying more than they need to.

“Wherever markets are not working for consumers, this government is prepared to act.”

Figures from GoCompare show that there are 30 dual fuel energy tariffs due to expire on 31 March, with customers facing an average increase of £269.

The motion in full:

That this House deplores the big six energy firms’ treatment of out-of-contract energy customers on default tariffs; believes immediate action is needed to protect these consumers, and that pushing customers to start switching will not fix the problem sufficiently quickly or completely on its own; and calls on the industry, regulators and the Government to consider solutions which recognise that many people lead busy lives where switching their energy supplier may not always be a high priority.

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