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.”

Arts and Entertainment
books
Voices
Caustic she may be, but Joan Rivers is a feminist hero, whether she likes it or not
voicesShe's an inspiration, whether she likes it or not, says Ellen E Jones
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Sport
Diego Costa
footballEverton 3 Chelsea 6: Diego Costa double has manager purring
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
3D printed bump keys can access almost any lock
techSoftware needs photo of lock and not much more
Arts and Entertainment
The 'three chords and the truth gal' performing at the Cornbury Music Festival, Oxford, earlier this summer
music... so how did she become country music's hottest new star?
Life and Style
The spy mistress-general: A lecturer in nutritional therapy in her modern life, Heather Rosa favours a Byzantine look topped off with a squid and a schooner
fashionEurope's biggest steampunk convention heads to Lincoln
News
Dr Alice Roberts in front of a
peopleAlice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
News
i100
Arts and Entertainment
Star turns: Montacute House
tv
News
i100Steve Carell selling chicken, Tina Fey selling saving accounts and Steve Colbert selling, um...
Arts and Entertainment
Unsettling perspective: Iraq gave Turner a subject and a voice (stock photo)
booksBrian Turner's new book goes back to the bloody battles he fought in Iraq
News
The Digicub app, for young fans
advertisingNSPCC 'extremely concerned'
News
i100
Arts and Entertainment
Some of the key words and phrases to remember
booksA user's guide to weasel words
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
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

Senior Data Scientist (Data Mining, RSPSS, R, AI, CPLEX, SQL)

£60000 - £70000 per annum + Benefits + Bonus: Harrington Starr: Senior Data Sc...

Law Costs

Highly Attractive Salary: Austen Lloyd: BRISTOL - This is a very unusual law c...

Junior VB.NET Application Developer (ASP.NET, SQL, Graduate)

£28000 - £30000 per annum + Benefits + Bonus: Harrington Starr: Junior VB.NET ...

C# .NET Web Developer (ASP.NET, JavaScript, jQuery, XML, XLST)

£40000 - £50000 per annum + Benefits + Bonus: Harrington Starr: C# .NET Web De...

Day In a Page

The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

Kacey Musgraves: Nashville's hottest new star

The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

Soldier-poet Brian Turner on his new memoir

James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

Villa were not surprised that Vlaar was a World Cup star

Andi Weimann reveals just how good his Dutch teammate really is
Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

Bill Granger's simple Italian salads

Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
The Last Word: Tumbleweed through deserted stands and suites at Wembley

The Last Word: Tumbleweed through deserted stands and suites at Wembley

If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution