U.K. opposition Labour Party leader Ed Miliband’s plan to cap energy prices if he wins the 2015 election was criticized by an adviser, who said it may give markets the “jitters.”
“One thing that can be certain is that, when politicians have interfered in markets to the extent where they completely nullify the effect of the market, then the economies do a darn sight worse,” John Armitt, Labour’s adviser on infrastructure policy, was cited as saying in an interview to The House magazine, which is distributed to lawmakers.
The policy to cap gas and electricity prices for 20 months, announced at Labour’s annual conference in September, has been popular with voters, polls indicate. Miliband argued that suppliers have been making excess profits at the expense of customers.
“You are directly intervening, and you get a short-term political benefit, you get a short-term benefit to people in their pockets, but it doesn’t address the long-term problem,” Armitt, the former chief executive officer of Network Rail Ltd., was cited as saying.
Organization for Economic Cooperation and Development Secretary-General Angel Gurria told the BBC last month the policy might bankrupt suppliers, adding to attacks from government ministers, including Chancellor of the Exchequer George Osborne, who said the freeze could damage investment and lead to blackouts.