ScottishPower chief Keith Anderson has rounded on UK Government plans for a price cap on gas and electricity bills claiming it could harm competition.
Anderson said the Government should instead make the “bold move” to scrap standard variable tariffs (SVTs) and only use price caps as punishment for firms that fail to move customers on to better value fixed deals.
ScottishPower hiked its SVT raised last month, with electricity prices rising by 10.8 per cent and gas by 4.7 per cent.
Work and Pensions Secretary Damian Green confirmed last weekend the Government will cap energy prices if it wins the General Election in June.
Iain Conn, who heads British Gas parent Centrica, warned on Tuesday a price cap could turn his group into a loss-making business.
Anderson notes in ScottishPower’s first quarter update: “A potential price cap could harm competition, so the bold move by Government would be to set a deadline to abolish SVTs and get every customer on a fixed-price deal instead.”
He added: “The Government could impose a target that two out of three customers should be on a deal by the end of 2018, and all customers on a deal by the end of 2019 with SVT abolished once and for all.
“Any company that fails to meet these targets should have a price cap not only imposed but retained until all their customers are on deals.”
Anderson said customers need to ensure they switch providers regularly to get the best tariffs.
“Just as you insure your car every year and go to the market for the best deal for you, so every energy customer should engage with the market at least once a year to make sure they are on the best deal for them,” he said.
ScottishPower’s first quarter results show its retail supply business saw profits fall by £81m, which it blamed on higher costs and mild weather conditions at the start of the year.
The drop in retail supply earnings helped push total underlying earnings across UK generatio nand supply down 73 per cent to £47m.
ScottishPower said it managed to stem customer churn in Q1, with gas and electricity accounts edging up to 5.5 million from 5.4 million a year earlier as it focused on offering attractive fixed rate deals.
Spanish parent Iberdrola saw group net profits fall 4.7 per cent to €827.6m (£704.8m) in the first quarter.