Following Ofgem’s announcement that it is increasing its price cap on default tariffs, Daniel Pryor, Head of Programmes at the Adam Smith Institute, says that the government should learn from global evidence that shows price caps do not work for consumers:

“The price cap was doomed from the start. Today’s announcement will surprise nobody with an understanding of the modern energy market. The international evidence is clear—price caps hurt competition, discourage innovation, reduce switching rates and ultimately punish people struggling to heat their homes with higher energy bills.

"If the Government wants to make a real difference to our living costs, they should scrap the cap and encourage real competition in the energy market: letting competing energy companies target disengaged customers with better deals, expanding opt-out collective switches, and giving people greater control over their smart meter data to more easily compare the best deals on market.”

If you would like to arrange an interview or further comment from Daniel Pryor, please contact Matt Kilcoyne (0207224995, 07904099599, matt@adamsmith.org).