Centrica: Energy price freeze could stop suppliers operating

Labour leader Ed Miliband’s energy policy pledge would not be economically viable for suppliers to operate, Centrica claims. The energy giant made the comment following the former Energy Secretary’s big […]

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By Priyanka Shrestha

Labour leader Ed Miliband’s energy policy pledge would not be economically viable for suppliers to operate, Centrica claims.

The energy giant made the comment following the former Energy Secretary’s big speech to freeze energy prices at his party’s annual conference in Brighton.

He promised they would stop gas and electricity prices from rising between May 2015 and January 2017 if his party won the next general election.

In another speech at the conference, Shadow Energy Secretary Caroline Flint also started a war against the Big Six energy suppliers when she pledged to break them up to stop them generating and selling power.

The owner of British Gas said in a statement: “The fact is that the rise in prices over the last five years has been due to three factors – higher commodity costs where Centrica has to compete to buy gas in a global market increases in regulated transportation and distribution charges and environmental costs and taxes.”

The company warned: “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 and far less to meet the sizeable investment challenge that the industry is facing. The impact of such a policy would be damaging for the country’s long term prosperity and for our customers.”

Smaller supplier Co-operative Energy, however, welcomed the Labour Party’s pledge.

General Manager Ramsay Dunning said: “A tough approach, like this, is required to tackle the spiralling profits the Big Six continue to enjoy and, most importantly, to create a fairer deal for customers who are struggling or in some cases, unable to pay their energy bills.

“It’s imperative that the Government is committed to making changes to reform the market, rebuild trust amongst consumers and ensure a fair deal for all.”

The general public, too, told ELN Labour’s plans are very reassuring for UK consumers struggling to pay their energy bills.

One said it would be “brilliant for young people, for people who are vulnerable, for the elderly, for people who live on welfare who cannot get jobs” and believed it would help them out in the long run.

Another added: “I think that would be a very popular decision. I think people will really relate to that because energy prices are something that’s close to everyone’s mind.”