Energy companies have been accused of behaving in an unfair and unreasonable way after raising prices before a proposed government price cap is introduced.
Centrica, the owner of British Gas, warned that Theresa May’s flagship policy would drive up prices even higher by reducing competition.
However, the Conservatives will on Tuesday confirm that the energy price cap forms a key pledge in their forthcoming election manifesto.
Energy suppliers were accused of “milking” their customers after they quietly raised the price of their cheapest gas and electricity deals by as much as 37 per cent since Mrs May first threatened to intervene last year.
The Conservatives said families are now paying £1.4 billion more for their energy than they should be, and promised to “put it right” by capping prices if they are re-elected.
But Centrica, owner of British Gas, hit back by saying a price cap would end up pushing up average prices as it warned the Prime Minister her policy would lead to “unintended consequences”.
Iain Conn, the company’s chief executive, said the policy was anti-competitive and pointed out that a similar policy in Spain led to a £20 billion deficit in spending on infrastructure.
The Tories believe a price cap –which would be set by the regulator Ofgem and re-set every six months – will knock up to £100 off annual bills for around 18 million households.