Ed Miliband is no more 'red' than the Tony Blair that won the 1997 general election

The Labour leader’s temporary freeze on energy bills is a fair and moderate step

Related Topics

The reaction to Labour's policy towards energy companies was immediate and apocalyptic. The Chancellor called it “a tax on jobs, bills and pensions”. The CBI said it was legally unworkable. The Liberal Democrats said it would “hit shareholders, including those millions of people with money in pension funds”. One energy company said the policy “will undermine our ability to invest, affect jobs and increase prices”. Another warned “We may have to cut our investment programme if we face a windfall tax”. The Electricity Association claimed it could cost over 6,000 jobs.

It was 1997, and the policy was the windfall tax on the privatised utilities masterminded by Tony Blair, Gordon Brown and Peter Mandelson as a central plank of New Labour’s manifesto to promote jobs and growth. The policy was enacted. The companies paid up. It worked.

Now, Ed Miliband has promised to reset an energy market that's failing to deliver for consumers, freezing energy bills until January 2017 while the reforms are enacted, and the same alarms have sounded all over again.

The former Labour leader they once accused of being dangerously left wing is now set up as a moderate contrast to a current Labour leader they accuse of being dangerously left wing. It's a familiar criticism, but it's one that – unlike soaring energy company profits – is subject to the law of diminishing returns.

The truth is that the big six energy companies, who supply to 98 per cent of homes, are failing to give consumers a fair deal. The problem is easy to state. Energy bills have risen by an average of almost £300 for families since the election. And it is not just households that are being hit. Companies say that energy is the second biggest cost they face, after wages, and this is a major threat to their competitiveness – or even to their viability. When wholesale energy prices went up in 2008, bills went up. But when wholesale electricity prices fell by 45 per cent in 2009, household bills only fell by 5 per cent. No wonder trust has fallen and support for Ed Miliband’s stand is so strong.

‘Pro-business, pro-reform’ were Tony Blair’s mantras. The energy market needs reform to increase competition and transparency. This is exactly what Ed Miliband is proposing. When a small number of companies control both the generation and the supply of energy, it’s difficult for new players to enter the market. That’s why Labour’s pro-market, anti-monopolistic proposals are so important: breaking up the energy companies so that the parts that generate electricity are legally separate from the parts that supply consumers; and forcing all generators to sell their energy into a pool from which it is sold on the open market instead of selling it to themselves behind closed doors.

Opening up closed markets to competition and protecting consumers from monopoly-style profits is the essence of pro-business politics on the modernising right as much as the left. It was the great cause of the Republican President Teddy Roosevelt more than a century ago. For the Conservative Party to become the mouthpiece of energy monopolists is not only a political error; it is fundamentally at variance with the liberal economics they claim to espouse. Labour is today’s pro-enterprise party. It champions the businesses wanting to bring greater competition to a failed market but who find the barriers to entry too high, and the businesses who are struggling with rising bills and would save an average £1,800 from a 20-month freeze in energy prices. Six entrenched energy companies are fighting Ed Miliband’s proposals; 2.4 million businesses will welcome it.

By siding with the companies sustaining today’s energy cartel, Conservative Ministers have made a clear choice. They are standing up for the few rather than for mainstream families and businesses who are seeing the cost of living rise and their incomes squeezed.

Ed Miliband’s temporary freeze on energy bills is a fair and moderate step to protect consumers and open a failed market to competition. The vested interests opposing it should be treated with the same degree of seriousness as we now regard their pre-1997 attacks on Tony Blair.

Andrew Adonis was Head of the Number 10 Policy Unit under Tony Blair.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

Guru Careers: Software Developer / Web Developer

£30 - 40k + Benefits: Guru Careers: A Software / Web Developer (PHP / MYSQL) i...

Guru Careers: Account Executive

£18 - 20k + Benefits: Guru Careers: An Account Executive is needed to join one...

Guru Careers: Software Developer / Software Engineer

£35 - 40k + Benefits: Guru Careers: A Software Developer / Software Engineer i...

Day In a Page

Read Next
Sepp Blatter and Vladimir Putin. Was Russia awarded the 2018 World Cup unfairly?  

Fifa arrests: Is it the final whistle for corruption in world football?

Mary Dejevsky
Alternative futures build into a chronicle of chance  

Independent Foreign Fiction Prize 2015: Winner Jenny Erpenbeck’s historical novel grips and dazzles

Boyd Tonkin
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor
The ZX Spectrum has been crowd-funded back into play - with some 21st-century tweaks

The ZX Spectrum is back

The ZX Spectrum was the original - and for some players, still the best. David Crookes meets the fans who've kept the games' flames lit
Grace of Monaco film panned: even the screenwriter pours scorn on biopic starring Nicole Kidman

Even the screenwriter pours scorn on Grace of Monaco biopic

The critics had a field day after last year's premiere, but the savaging goes on
Menstrual Hygiene Day: The strange ideas people used to believe about periods

Menstrual Hygiene Day: The strange ideas people once had about periods

If one was missed, vomiting blood was seen as a viable alternative
The best work perks: From free travel cards to making dreams come true (really)

The quirks of work perks

From free travel cards to making dreams come true (really)
Is bridge the latest twee pastime to get hip?

Is bridge becoming hip?

The number of young players has trebled in the past year. Gillian Orr discovers if this old game has new tricks
Long author-lists on research papers are threatening the academic work system

The rise of 'hyperauthorship'

Now that academic papers are written by thousands (yes, thousands) of contributors, it's getting hard to tell workers from shirkers
The rise of Lego Clubs: How toys are helping children struggling with social interaction to build better relationships

The rise of Lego Clubs

How toys are helping children struggling with social interaction to build better relationships
5 best running glasses

On your marks: 5 best running glasses

Whether you’re pounding pavements, parks or hill passes, keep your eyes protected in all weathers
Raif Badawi: Wife pleads for fresh EU help as Saudi blogger's health worsens

Please save my husband

As the health of blogger Raif Badawi worsens in prison, his wife urges EU governments to put pressure on the Saudi Arabian royal family to allow her husband to join his family in Canada
Birthplace of Arab Spring in turmoil as angry Tunisians stage massive sit-in over lack of development

They shall not be moved: jobless protesters bring Tunisia to a halt

A former North African boom town is wasting away while its unemployed citizens stick steadfastly to their sit-in
David Hasselhoff's new show 'Hoff the Record': What's it like working with a superstar?

Hanging with the Hoff

Working with David Hasselhoff on his new TV series was an education for Ella Smith