* Centrica CEO cautions May's government over energy
* PM May's Conservatives plan energy price cap for
* Centrica shares fell after pledge announced
* May has said she supports free markets
By Kate Holton
LONDON, April 25 A plan by Prime Minister
Theresa May's Conservative Party to cap energy prices suggests
some in her government do not believe in free markets at a time
when it is pinning its post-Brexit hopes on free trade, the head
of the country's leading provider said.
Shares in Centrica, the owner of British Gas, and
SSE, fell sharply on Monday after May's party set out
plans to hold down the prices households pay for gas and
electricity which have doubled in the last decade.
Iain Conn, the chief executive of market leader Centrica,
said the proposal would damage competition and wipe out any
money it made from consumers, forcing it to cut costs and reduce
"I'm the first to admit that the UK market is not perfect,"
Conn told BBC Radio. "I just don't think that capping prices is
the right way to help the market and it probably will have
"I think there are some at the heart of government who just
don't believe in free markets and 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."
May last year praised free markets and free trade in a
speech to party activists but also said that she would be
prepared to intervene where markets were dysfunctional or where
companies were exploiting the failures of the market.
Shares in Centrica fell as much as 5 percent at one point on
Monday after the Sunday Times said the plans could cut gas and
electricity costs by 100 pounds ($128) a year for 17 million
The Conservative party has confirmed it will set out plans
to intervene in the energy market in its manifesto for the June
8 election, but has not yet gone into details.
The proposal echoes a 2015 election pledge made by the
opposition Labour party which was criticised at the time by the
Conservatives as being a gimmick that showed the then party
leader wanted to live in a "Marxist universe".
Energy bills have doubled in Britain over the past decade to
about 1,200 pounds ($1,640) a year, angering consumers who face
rising inflation, and drawing the ire of politicians. Energy
companies say higher prices reflect increased wholesale costs
and environmental levies.
The sector is dominated by the big six providers of
Centrica, SSE, Scottish Power, Npower, E.ON
(Reporting by Kate Holton; editing by Guy Faulconbridge)