Ed Miliband has vowed to “take action” against energy companies if they defy Labour by raising energy bills ahead of the next election to avoid a price freeze.
It follows his announcement at his party’s annual conference yesterday that he would stop gas and electricity prices rising until 2017 if he came to power.
“If the companies were really to get together and collude to have price increases between now and the election I think that even [Ofgem] would take a dim view of it,” Mr Miliband told BBC Radio 4’s Today Programme.
He added: “If that’s what the companies do we will obviously have to take account of that in any decisions we make and I’m absolutely clear that we will make sure that this freeze is a genuine freeze that works for the consumers.”
The former Energy Secretary has admitted the measures would not be popular with energy companies but tried to win them over in an open letter today, writing: “I appreciate that you will not welcome all aspects of this package. But it is my firm view that without resetting the market we are not going to see the public consent that is required to underpin the scale of taxpayer backed guarantees for which you have argued.
“I am prepared to make the case for sharing the risks of such investment, but that must be against the backdrop of a market that customers believe works for them.”
He went on to offer an ultimatum to the big energy suppliers: “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.”
Environmental group Friends of the Earth told ELN they agreed the Big Six suppliers already have too much power in the energy market.
Campaigner Donna Hume added: “At the moment for example, it’s very hard for energy generators to sell their power into it. We don’t know yet whether or not splitting them [the Big Six] in that way will work but something certainly needs to be done to reform the energy market and also to help people generate more of their own green energy as well.”