It was a bold statement made at a time when David Cameron was forced to do something to cut the cost of domestic energy. As the Prime Minister cut a green levy tax to give households an annual £50 saving Ed Miliband declared that he would freeze prices for a full twenty months.
Of course the public responded with glee as the rising costs have left many unsatisfied but the truth is this move could cost the consumer a lot as experts now warn.
Just how much of an average energy bill is profit for the suppliers?
This time it was Peter Atherton that spoke out, a respected leader and analyst in the energy industry he detailed how this pledge could cripple the industry. He warned that with the election not far away prices would rise before labour came into power, costing the industry a whopping £4.5 billion through this promise alone.
Predictions are Coming True
He also warned that investors would be deterred by the freeze, a prediction that is already ringing true as the chief executive of Centrica states in his recent warnings.
That’s not all though as Peter went on to tell of the other consequences of the freeze for the average consumer. Alongside “brownouts” where industrial companies are asked to cut back, leading to a lower voltage output in many areas. Blackouts will surely follow.
When the price freeze expires on the 1st of January 2017, energy companies may fight to recoup the huge losses made by raising prices by a third.
He’s advised the biggest energy providers to take legal action if this happens in order to stop Ed Miliband enforcing the pledge. He hinted at a “pass the buck” attitude where the government are washing their hands of the responsibility of the price hikes despite their green levies and transmission fees being a contributing factor to the increase.
The promise may get Ed Miliband into power but it will leave many homes without.