Ed Miliband delighted consumers and enraged energy firms yesterday as he pledged to freeze gas and electricity bills in a bold pitch to become the next prime minister.
The Labour leader announced plans to break-up Britain’s big power companies as he vowed to “reset” the market in a radical move designed to save families an average £120 and businesses £1,800.
But the freeze between 2015 and 2017 would come at a cost of £4.5billion to the energy sector, prompting warnings from coalition ministers and power firms that it could jeopardise jobs and investment and risk “the lights going out”.
In his keynote speech to Labour’s Brighton conference, Mr Miliband also announced his support for giving votes to 16 and 17-year-olds. He also plans to increase the minimum wage and vary it by sector and build hundreds of thousands of homes.
He would also combine the NHS with mental health and care for the elderly in England.
He received four standing ovations from delegates in a speech that lasted more than an hour and was delivered without notes for a second year running.
Repeatedly using the phrase “Britain, we’re better than this”, he spoke about a “cost of living crisis” and what Labour would do about it.
Last year, the Labour leader used his widely-praised conference address in Manchester to seize the Conservative Party’s “one nation” tradition and claim it as his own.
His plan to shake up the energy sector this year was equally bold and politically risky, with opponents immediately branding it a lurch to the left and the return of “Red Ed”.
On Scotland’s future, Mr Miliband called on activists to go out and “win the battle for perhaps the most important institution of all”, the UK.
He told delegates the story of Glasgow resident Cathy Murphy, who fell ill at Labour’s 2011 conference and received treatment at a Liverpool hospital, where she returns for check-ups.
“She said to me that the nurses and doctors don’t ask whether she is English or Scottish, the hospital doesn’t care where she lives,” Mr Miliband said, before adding: “Friends, I don’t want Cathy to become a foreigner. Let’s win this battle for the United Kingdom.”
Angus Robertson, SNP MP for Moray, said the attack on independence showed “an astonishing lack of knowledge” of the NHS and Scotland, as the nation already has a separate health policy.
Announcing the energy reforms, Mr Miliband told delegates: “The system is broken and we are going to fix it.”
He added: “Now the energy companies aren’t going to like this because it will cost them more but they have been overcharging people for too long because of a market that doesn’t work.
“It’s time to reset the market.”
Mr Miliband’s prediction about the response proved accurate.
Angela Knight, chief executive of trade body Energy UK, said: “Freezing the bill may be superficially attractive, but it will also freeze the money to build and renew power stations, freeze the jobs and livelihoods of the 600,000 plus people dependent on the energy industry and make the prospect of energy shortages a reality, pushing up the prices for everyone.”
Alistair Phillips-Davies, SSE chief executive, said: “Instead of price freezes which will lead to unsustainable loss-making retail businesses, the Labour Party should put policy costs into general taxation, taking them off energy bills.”
Energy Secretary Ed Davey said: “When they tried to fix prices in California it resulted in an electricity crisis and wide-spread blackouts. We can’t risk the lights going out here too.”
But Richard Lloyd, executive director of consumer group Which?, welcomed the move.
“Ed Miliband’s promise to fix the broken energy market and freeze prices will give hope to the millions worrying about how they can afford to heat their homes,” he said.
Dame Anne Begg, Labour MP for Aberdeen South, said: “Everybody wants cheaper energy bills. The whole point of this is that many of these companies profits are going up, and we need a fair deal.”