OECD Head Attacks Miliband’s U.K. Energy-Price Freeze PlanRobert Hutton
The U.K. Labour Party’s plan to cap energy prices for 20 months if it wins the 2015 election might bankrupt suppliers, Organization for Economic Cooperation and Development Secretary-General Angel Gurria told the BBC.
The policy, announced by opposition leader Ed Miliband at Labour’s annual conference in September, has been popular with voters and forced the government to respond in the Dec. 5 Autumn Statement. Miliband argued that suppliers had been making excess profits at the expense of customers.
“If you freeze the price of energy, and the international price of energy rises, it means there’s going to be a very big difference to pay,” Gurria said in an interview with the BBC, to be broadcast later today. “Who’s going to be paying the difference? Are you going to ask the investors? They’ll probably go bankrupt. How are you going to get people to come in and invest to get their money back in 30, 40 years’ time when you say there’s going to be a freeze?”
Gurria’s intervention may lend weight to attacks on the Miliband plan from government ministers, including Chancellor of the Exchequer George Osborne, who said the freeze could damage investment and lead to blackouts.