Energy Chaos: Britain May Face Blackouts As Labour Promises Price Freeze
A promise by Ed Miliband to freeze gas and electricity bills provoked warnings last night of blackouts, job losses and a threat by one leading energy company to leave Britain.
The Labour leader’s annual conference speech staked his chances of winning the next election on a pledge to protect householders by using the full might of the State in the power and housing markets.
And he took head-on questions over his personal ratings, saying that he was ready for a toe-to-toe fight with David Cameron over character. In an address aimed squarely at the party’s traditional supporters, Mr Miliband said that squeezing living standards was a deliberate aim of the coalition’s economic policy, and promised to reverse what he called a “race to the bottom”.
The prospect of aggressive market intervention, including a return of price and wage controls and moves to shift the tax burden to larger companies, prompted a backlash from business groups.
The Confederation of British Industry said that Labour had damaged its “pro-enterprise credentials”.
Mr Miliband’s signature policy, a 20-month freeze on gas and electricity prices, provoked fury from the energy companies. The proposal, which Labour claims would save households £120 and businesses £1,800 but cost the energy firms about £4.5 billion in lost revenue, was welcomed by consumer groups.
Labour say that Ofgem, the energy regulator, has failed to protect consumers and should be replaced with a tougher watchdog.
Reprising his main theme, Mr Miliband said: “Your bills will be frozen, benefiting millions of families and millions of businesses. That’s what I mean by a government that fights for you, that’s what I mean when I say, Britain can do better than this.”
Aides said that a Labour government would legislate to impose the freeze as soon as it took power and would then reform the market. Companies would be made to sell their energy into a pool, opening up the market to other entrants.
Centrica, one of the big six energy companies, said that it was prepared to leave the country if it was forced to hold retail prices at a set level while the wholesale cost rose. Sir Roger Carr, its chairman, said that the policy threatened economic ruin.
The policy could hit investment and jobs and lead to blackouts, according to warnings from energy companies and some business consumers.