Centrica boss says energy market 'working for customers' - but Ed Miliband still wants a price freeze

Both the regulator and the government believe that competition in the energy isn't working, that prices are too high and customer service not up to scratch.

But the boss of Centrica - which runs British Gas - loudly disagrees.

Are energy price caps a good idea? Credit: PA

This morning, British Gas reported a sharp fall both in profits and the number of complaints. The company extended its price freeze to August.

Centrica's CEO told ITV News that this is proof that the market is "working for customers".

It's time to stop "banging on about switching" said Iain Conn. Apparently, customers "know how easy it is".

Government intervention is "unnecessary", a cap on energy prices would have "unintended consequences".

Conventional wisdom has it that anyone on a Standard Variable Tariff is paying more for their gas and electricity than they should be.

The boss of Centrica disagrees that the energy market is not working Credit: PA

British Gas has five million customers on a standard tariff. The company's own figures show they could save £210 a year if they switched to the cheapest energy deal on the market.

Iain Conn argues that they stay not because they are confused or apathetic but because they are happy where they are.

"Frankly the standard tariff gets a bad rep," he told me.

"A lot of customers value these tariffs, they don't want to be always switching."

Nevertheless, in Westminster, the noises point to government intervention.

Iain Conn warned a price cap, however temporary, would lead to the cheapest fixed deals disappearing and would push some suppliers out of business, reducing choice.

He told ITV News:

If the government introduces a price cap, there’s significant chance of unintended consequences.

For example, one thing that has been talked about is... if you're on a fixed deal, at the end of it, why don't we limit the amount that the price can go up?

The problem with that is, I think it's going to put all of fixed price deals up and that's an unintended consequence. Likewise, if the government starts price regulating, it will probably reduce the number of competitors in the market, which will reduce choice for consumers.

And finally, if governments start price regulating again, when do they stop?

– Iain Conn, Centrica

You may recall that in September 2013 Ed Miliband, the former Labour leader, announced a plan to freeze gas and electricity bills.

Ed Miliband announced plans for an energy price freeze at the Labour Party Conference in 2013 Credit: PA

The idea was strongly criticised. The then-chairman of Centrica warned of “economic ruin”, the industry warned of blackouts and the conservative party dismissed it as "a con".

Now, the con may be on. The government is considering a range of remedies and won't rule a price cap out.

As for Ed Miliband, his view is unchanged.

In a statement, he told ITV News: "The energy market was broken in 2013 and it is broken now. Imposing a temporary price cap and resetting the market made sense then and would make sense now."