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Miliband hits out at energy giants
Warnings that Britain could face blackouts if Labour enforces a freeze on gas and electricity prices were dismissed as "scare stories" by Ed Miliband, as he compared the energy companies to banks resisting regulation ahead of the 2008 crash.
Mr Miliband wrote to the "Big Six" companies warning that they would face a consumer backlash if they fought his plans for a 20-month freeze following the next general election in May 2015.
His surprise announcement at the Labour conference in Brighton on Tuesday was greeted with horror by energy suppliers, with predictions that firms deprived of the power to set their own prices would be in danger of "economic ruin". Shares in Centrica - British Gas's holding company - fell by 5.3% in trading over the course of the day, while shares in Swalec owner SSE fell 5.8%.
Centrica chairman Sir 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."
And Angela Knight, chief executive of trade body Energy UK, said that while the price freeze was "superficially attractive", it would "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".
But Mr Miliband made clear he would not be moved by warnings that companies could scale back investment or pull out of the UK power market, or that the lights may go out as a result of the freeze.
In his letter, he told the Big Six: "You and I know that the public have lost faith in this market. There is a crisis of confidence. We face a stark choice. 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."
Mr Miliband said he would not tolerate companies "colluding" to raise prices in the period before the election to offset the financial impact of the freeze, estimated to save the typical household £120 and an average business £1,800 between May 2015 and January 2017, at a cost to industry of £4.5 billion. He said Labour would support David Cameron if the Prime Minister implemented an immediate freeze.
After a week in which Mr Miliband unveiled plans for a hike in corporation tax, compulsory purchase of land being hoarded by developers and new requirements for employers to take on apprentices, Conservatives said that the Labour leader had revealed himself to be "Red Ed".
And CBI director-general John Cridland said the conference had delivered "a real setback for Labour's pro-enterprise credentials". Mr Cridland told BBC2's Daily Politics: "I think business as a whole will say we look to the Labour Party to speak for all business, not to beat us up and then say it's speaking for small business, not large business. Speak for all business, Ed, and do it in a way which takes businesses with you."