Warning after Labour leader Ed Miliband promises a cap on energy prices

Sizewell B

Sizewell B - Credit: Archant

Energy prices would be capped until 2017 under a Labour government Ed Miliband announced yesterday, prompting warnings new power stations such as Sizewell C will be put at risk.

Under the plans the big energy firms would be split up and governed by a new tougher regulator to give people 'a fairer deal' – a move Labour say would save average households £120 and businesses £1,800.

While EDF – which is behind the Sizewell C project – declined to comment specifically about the plans, the sector's umbrella group, Energy UK, hit out at Mr Miliband in a strongly worded statement.

Angela Knight, chief executive, said: 'Freezing the bill may be superficially attractive, but it will also 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.'

She said that no other industry was facing the investment challenge of the energy sector.

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But Norwich South parliamentary candidate Clive Lewis, said: 'I don't believe this is going to jeopardise jobs. They have been making billions of pounds of profits for years on end. For them to turn around and start crowing about freezing energy prices for two years... to be quite frank, I haven't got time to hear that. To be honest, they can afford it.

'The reality is, people need it. There are lots of people in Norwich South who are unable to pay their energy bills and this freeze for them will be a godsend.'

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Ramsay Dunning, general manager at Co-operative Energy also welcomed the pledge, saying a 'tough approach' was required to tackle the spiralling profits the 'Big Six' continued to enjoy and, most importantly, to create a fairer deal for customers who were struggling – or in some cases, unable – to pay their energy bills.

But Adam Scorer, director of Consumer Futures, warned the prospect of a price freeze might ramp up prices in the short term and dismantle the structure of the market – putting off decisions by energy companies or others to invest in new, cleaner generation capacity. James Gray, inward investment director at the East of England Energy Group said the devil would be in the detail as the plans needed to be set against important capital investment programmes that needed to be seen in the UK.

He added: 'I would be more excited if he had focused on the importance of sorting out an agreed price for offshore wind so that major Round 3 projects can move forward... and pressing for UK content.

'Energy security is important – not just price.'

Conference diary – Page 27

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