The heat is on: Defiant Ed Miliband attacks 'scare stories' over Labour energy price freeze pledge as £950m wiped off Centrica shares

Critics raise fears over power cuts and impact of Labour leader’s intervention

Political Editor

Ed Miliband vowed that he would not be deflected from his flagship plan to freeze gas and electricity prices despite criticism from the energy companies, the Coalition parties and even some Labour figures.

Some Blairites expressed anxiety about Mr Miliband’s interventionist stance, viewing it as a deliberate break with New Labour. Lord Mandelson, the former Business Secretary, said: “At the Business Department, I tried to move on from the conventional choice in industrial policy between state control and laissez faire. The industrial activism I developed showed that intervention in the economy - government doing some of the pump priming of important markets, sectors and technologies – was a sensible approach. As a result of the [Miliband] speech, I believe that perceptions of Labour policy are in danger of being taken backwards.”

Lord (Digby) Jones, the crossbench peer who served as Trade Minister under Gordon Brown, warned that Mr Miliband’s policies would make it harder to attract foreign investment to Britain. He said:  “The sheer damage it will do to the economy does not bear thinking about. They are talking that this will be the end of the energy market - it’s far more dangerous. This is sheer, unbridled socialism. He is going to hijack the organs of management.”

About £950m was wiped off the value of energy giant Centrica, British Gas’s holding company, on the day after Mr Miliband announced that  an incoming Labour Government in 2015 would peg gas and electricity charges for 20 months. Shares dropped nearly five per cent, dropping 18.6p to 378.1p. SSE, formerly Scottish and Southern Energy, saw its shares fell 83p, or 5.3 per cent, to 1497p.  Analysts said the fall was not all due investors’ concern about Labour’s new policy.

The Tories claimed the Labour was in retreat after he conceded that he might have to rethink his price freeze if wholesale prices rocketed during an energy crisis. Labour dismissed that as nonsense, and Mr Miliband insisted: “This is going to happen.”

An unrepentant Mr Miliband dismissed as “scare stories” the energy companies’ warnings that a price freeze would result in power cuts as investment in new power stations was cut.

He said: “It makes me think of the banks. The banks used to threaten, conjure up scare stories, talk about the impact of regulation, and the Conservative Party supported them, and actually we should have had tougher regulation, and so it makes me think that actually we’ve got to do the right thing by the country, and that’s what I’m going to do.” He added: “Threats, scare stories, that’s not the way we should make policy, we should make policy in the national interest, the interest of the British public and that’s what I’m going to do.”

Asked if he would intervene in other industries like mobile phones or broadband, Mr Miliband said his proposed move was a “last resort” and energy was an “exceptional case”.

In a round of media interviews  as the Labour conference in Brighton came to a close,  he warned that he would take action as an incoming prime minister if the “big six” energy firms raised prices before the 2015 election to cushion themselves against a price freeze. “I’m not going to tolerate the energy companies using the fact that there’s going to be a price freeze to somehow collude in raising prices before the election,” he said.  “We are going to make this a meaningful freeze. We will make sure we do that.”

Labour will launch a major campaign to promote its new policy, including an online calculator to enable people to work out how much they would save. The party will target hundreds of thousands of voters in key marginal seats.

Grant Shapps, the Tory chairman, claimed Mr Miliband’s unworkable policy was unravelling. “He’s been forced to admit that energy companies could appeal to the Government to overturn the freeze - and had no answer when asked what would happen if prices were put up before a freeze,” he said.

Ed Davey, the Liberal Democrat Energy Secretary, said: “Government price fixing jeopardises investment in new power stations, making power cuts a real possibility. It also puts at risk Britain’s transition to a clean, green, low carbon future. The best way to keep everyone’s bills down is to help people to save energy, ensure fair tariffs and encourage competition.”

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
Mark Wright and Bianca Miller in the final of The Apprentice
tvMark Wright and Bianca Miller fight for Lord Sugar's investment
Arts and Entertainment
X Factor winner Ben Haenow has scored his first Christmas number one
music
News
news
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
James May, Jeremy Clarkson and Richard Hammond in the Top Gear Patagonia Special
tv
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
News
Claudia Winkleman and co-host Tess Daly at the Strictly Come Dancing final
people
News
i100
Extras
indybest
News
peopleLiam Williams posted photo of himself dressed as Wilfried Bony
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
Arts and Entertainment
The Apprentice finalists Mark Wright and Bianca Miller
tvBut who should win The Apprentice?
News
The monkey made several attempts to revive his friend before he regained consciousness
video
Extras
indybest
News
Elton John and David Furnish will marry on 21 December 2014
peopleSinger posts pictures of nuptials throughout the day
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: National Account Manager / Key Account Sales

£30000 - £35000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Operations Manager

£30000 - £35000 per annum: Recruitment Genius: An exciting opportunity to join...

Recruitment Genius: Recruitment Consultant

£30000 - £35000 per annum: Recruitment Genius: We have an excellent role for a...

Recruitment Genius: IT Support Analyst - Bristol

Negotiable: Recruitment Genius: An IT Support Analyst is required to join the ...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick