Labour leader Ed Miliband has come under fire for proposing a cap on energy price rises for 20 months if he wins the 2015 election.
The move was branded an “economic ruin” that would hit plans of building new power stations, jobs and the livelihoods of 600,000 people that are dependent on the industry.
Speaking to BBC News, Miliband said: “I’ve written a letter to [the energy companies] this morning saying there’s a crisis of confidence in the system.
“It’s time we fixed it and they can either choose to be part of the problem or part of the solution. I hope they choose to be part of the solution.”
British Gas owner Centric, however, threatened to quit the UK if the proposals went ahead.
In a statement, the energy supplier said: “If prices were to be controlled against a background of rising costs it would simply not be economically viable for Centrica, or indeed any other energy supplier, to continue to operate, and far less to meet, the sizeable investment challenge that the industry is facing.”
The Institute of Directors (IoD), the British Chambers of Commerce (BCC) and the Confederation of British Industry (CBI) also criticised the proposals, saying that a cap was a setback for Labour’s enterprise credentials.
Simon Walker, director general of the Institute of Directors, said: “We should think very, very carefully before piling more distortion on an already grossly distorted energy market. Price controls only add greater uncertainty to companies who we need to take the financial risks of energy investment.
“It was also a great shame not to hear anything about the potential benefits of domestic shale gas exploration, which must feature as part of the UK’s long-term energy strategy.”
The CBI also warned against the policy. Director-general John Cridland said: “Businesses will view the proposals on tax and energy as a setback for Labour’s pro-enterprise credentials. Rising energy bills are tough on families and businesses, but the proposed energy price freeze will deter much-needed investment.”
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