Ed Miliband faced a concerted backlash from energy companies and the government today, after pledging to freeze energy bills if he becomes prime minister.
The Labour leader was warned his proposal to freeze gas and electricity prices for 20 months would lead to lights going out across the UK.
“When they tried to fix prices in California it resulted in an electricity crisis and widespread blackouts,” energy and climate change secretary Ed Davey said.
“We can’t risk the lights going out here too.”
The big six energy companies issued stark warnings about the proposal. Energy Watch, the trade body representing the firms, claimed it would threaten their livelihoods.
“It will freeze the money to build and renew power stations, freeze the jobs and livelihoods of the 600,000-plus people dependent on the energy industry and make the prospect of energy shortages a reality, pushing up the prices for everyone,” chief executive Angela Knight said.
Centrica, which owns British Gas also warned the policy was “a recipe for economic ruin.”
“If prices were to be controlled against a background of rising costs it would simply not be economically viable for Centrica, or indeed any other energy supplier, to continue to operate” chief executive Roger Carr said.
“We are all concerned about rising prices and the impact on consumers, but we also have a very real responsibility that we find supplies to make sure the lights stay on,” he added.
The Labour leader today hit back at the firms, accusing them of “predatory behaviour.”
In a letter to the bosses of the six big energy firms, he warned they faced a “stark choice”.
“You and I know that the public have lost faith in this market. There is a crisis of confidence. We face a stark choice,” he wrote.
“We can work together on the basis of this price freeze to make the market work in the future. Or you can reinforce in the public mind that you are part of the problem not the solution.”
He claimed energy companies were colluding with government against the interests of consumers.
“There will be people like the energy companies who will have scare stories. This government who has done nothing to tackle the cost of living crisis, they’ll side with the energy companies. I’m squarely on the side of the British public,” he told BBC Breakfast.
He accused the companies of only speaking out of self interest.
“The energy companies are completely unreliable witnesses on this. After all they’re overcharging people and they don’t want someone to call time on it and I am determined that we call time on it.”
Miliband’s proposals have been treated with widespread scepticism in the press today. The Telegraph and Times accused the Labour leader of returning to the politics of the seventies, while the Daily Mail warned that Britain could be “plunged into darkness” if Miliband gets his way.
Labour believes a price freeze could save families around £120 a year but cost energy firms around £4.5 billion in lost revenue.
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