British Gas boss Iain Conn claims Conservative government does not believe in free market

The boss of one of Britain's largest energy providers has accused the government of lacking faith in the free market, after the Conservative Party unveiled plans to include a cap on household energy bills in their election manifesto.

Iain Conn, the chief executive of British Gas' owner Centrica, said he was "concerned" by the approach taken by the government.

"I'm the first to admit that the UK market is not perfect. I just don't think that capping prices is actually the right way to help the market, and it probably will have unintended consequences," he told BBC Radio 4's Today programme.

"Governments and regulators do have to set the conditions within which markets operate, but clearly there are ways of doing this.

"And I think there are some at the heart of the government who just don't believe in free markets. I find that concerning at a time when this market is highly competitive, and the UK is seeking to forge a new future relying upon free trade with the rest of the world."

The idea of a cap on household energy tariffs was first put forward by former Labour leader Ed Miliband in the run up to the 2015 general election, but the Tories have now made it their own, prompting strong criticism from the industry.

On Monday (24 April), Scottish Power became the second of the Big Six energy suppliers to hit out at the Conservatives' plans as Keith Anderson, the group chief corporate officer of Scottish Power, said such a cap on prices could "stop competition" and "actually damage customers in the long run".

Conservative MPs have justified their decision to intervene by claiming households are paying too much for their energy bills and reports have suggested they could seek to cut gas and electricity costs by £100 a year for 17 million households.

According to data released last month by small energy supplier First Utility, British households have spent £7bn more than they should have on energy bills over the last three years.

"This is a market that is not working perfectly and therefore we are intervening to make markets work better," Defence Secretary Sir Michael Fallon said on Monday.