The head of energy giant ScottishPower has warned that a political pledge to freeze gas and electricity bills could jeopardise billions of pounds of investment and thousands of jobs.
Keith Anderson, the Spanish-owned firm’s chief corporate officer, said the policy would sow “doubts and fears” about whether money should be ploughed into a sector facing costly modernisation and renewable-energy projects.
In a letter to Labour leader Ed Miliband, who has promised to freeze energy prices for 20 months if his party wins the 2015 general election, Mr Anderson spelled out how this might affect ScottishPower’s plans to invest up to £15billion in the UK.
The total includes an extra £5.2billion the firm aims to spend on its distribution network, a scheme which will play a major role in connecting renewable-energy to the national grid.
This would be in addition to the £2.6billion investment in the network between now and 2021.
Together the projects would create 4,500 new jobs, Mr Anderson said.
There are also plans to invest up to £5billion in renewable-energy in the UK, where ScottishPower has 5.6million customer accounts.
Mr Anderson said there were “understandable and widespread concerns about consumer prices”.
But he added: “Any move to freeze all domestic bills will not alter the fact that the investment Britain needs still has to be paid for.
“Such a freeze would cause investors to doubt they will receive an adequate return or to fear future similar interventions.
“Those doubts and fears would be reflected in the appetite to invest.”
He hinted that investment by ScottishPower, which is owned by Spain’s Iberdrola, could go elsewhere if the corporate climate in the UK were to change.
“As an international energy company, we carefully analyse all of the major markets in the world,” he said, adding: “Maintaining principles of sound regulation and avoiding regulatory uncertainty are critical to securing this global investment in the UK.”
Mr Anderson’s warning about the consequences of Labour’s pledge is the latest alarm sounded by the energy industry, which has already voiced concerns the freeze could lead to blackouts and job losses, or halt the building of new power stations.
In a separate letter to Mr Miliband, Prime Minister David Cameron and Deputy Prime Minister Nick Clegg, the chief executive of SSE – whose businesses include Scottish Hydro Electric – warned of the damaging effects of division over energy policy.
SSE’s Alistair Phillips-Davies said the breakdown of political consensus meant investments were becoming riskier and borrowing more expensive, with consumers ultimately paying more.