Miliband: Playing With Fire by Freezing Prices

Last weekend, Greg Barker MP was in the news speaking out in defence of recent profits recorded by energy companies in the UK. His comments came as a refreshing counter to the rhetoric we have come to expect on the subject, which focuses on ever-increasing tariffs and commonly tars the ‘Big Six’ as profiteering, greedy and exploitative. Barker instead reminded us that not only are our energy prices lower on average than many EU countries, but that we are relying on these suppliers to provide a substantial contribution to the £110 billion needed to address the issue of our crumbling energy infrastructure, and that they can’t invest in new projects without funding from old.

Barker’s words brought a different perspective to the fore, one that steers clear of knee-jerking and sensationalism, and I would have congratulated him for it independently of this week’s news. However, this was prior to the astonishing claim made by Ed Miliband during his party address on Tuesday, namely that Labour will freeze energy prices until 1st January 2017 if they win the next election.

Miliband, who served as Secretary of State for Energy and Climate Change before becoming Leader of the Opposition in 2010, has no excuse for making a pledge of this nature; if there is one area of parliament with which he should be most comfortable, it’s energy. He’s talking about privately-owned companies, who answer to shareholders and must be reactive to global supply chain movements; if he takes this freedom from them, the drop in share prices seen on Tuesday night can only move in one direction and it isn’t upwards.

Many have already labelled this policy ‘economic suicide’, as the chain of potential damage caused by any imposed cap is remarkable. There have been suggestions that affected companies will hike their prices ahead of time to make up for the losses they will otherwise incur if it is enforced, rendering the whole exercise redundant, and shareholders have already called for them to reduce investment in the UK in favour of fairer markets, which we cannot afford to risk given the state of the UK’s infrastructure.

I fail to see how Miliband wouldn’t have seen this coming, which makes it easy to view any promise to freeze prices as the worst kind of populist politics, attempting to curry favour from voters with total disregard for the consequences. If Miliband is out for total control of the energy companies, why does he not re-nationalise them? The answer is plain: the UK cannot afford to foot the bill. Which brings us back to what Greg Barker said not even a week ago: these companies need money in order to fix the mess we’re currently in. A price freeze combined with another bad winter could be devastating to the industry, and with what money are they then supposed to come to the rescue as power plants go into retirement and those that remain are no longer up to the job?

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As Chairman of the Rolton Group, Peter provides high-level strategic advice to a range of governmental, public sector and commercial clients. He is an acknowledged specialist in the renewable energy sector, and there is good reason for this: when it comes to energy, Peter is clear about the issues we face and the need for a cohesive strategy to tackle them. He is a passionate advocate of informed debate, and has consistently brought clarity to this complex situation."If the UK is united on one thing about energy it is that, on an individual basis, the public knows what it’s not in favour of. When it comes to offering up solutions, it’s not that confident. Pointing at single solutions like wind farms and saying that they are too expensive is missing the point. Carbon-based forms of energy like oil and gas are running out. Energy is going to be more expensive and a portfolio of renewable energies will necessarily be part of our solution in the future." Peter holds particular expertise in the areas of site-wide energy planning, zero carbon power generation, low carbon design, carbon offsetting and the application of renewable technology. He has acted as a Government advisor on numerous consultations and white papers, presenting to the Secretary of State on a number of occasions on the subject of renewable planning and public sector engagement. He has worked as a strategic partner with some of the world’s largest and most successful blue-chip companies, and is a Director of Renewables East, the renewable energy agency for the east of England.Peter is both a chartered building services engineer and a chartered member of the Institute of Energy, and has gained accreditation under the Carbon Trust Consultant Accreditation Scheme for solution development, with particular expertise in the establishment of energy strategies. He founded his first business, Rolton Services Consultants Limited, in 1989, and founded Cool Planet Technologies, a specialist renewable energy delivery partner which was sold to British Gas in 2010. He has been the architect of the path through which Rolton Group has addressed the challenges of renewables, carbon and the built environment."We need to see the bigger picture and not become hung up on individual technologies and individual costs. We need a completely different technology mix and not a reliance on one form of energy supply. We need all forms of technology to be applied – and we need it to happen quickly."

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