Labour leader Ed Miliband launched his party's energy green paper to end the energy "rip-off"

Government denies asking energy firms to hold prices

The Government has denied reports it has urged the Big Six energy firms to hold prices until the middle of 2015.

The news comes as Labour leader Ed Miliband launched his party’s energy green paper today that includes a previous commitment to freeze energy prices if Labour wins the general election, as well as plans for a tough new regulator, an independent body to plan new infrastructure, action to boost competition among suppliers and plans to simplify bills for customers.

Speaking from a summit in Vilnius, Lithuania, Prime Minister David Cameron continued to claim Labour's plans were a “con”, but the BBC has reported that industry sources said the Government has asked them to try to avoid another round of price rises barring any big increase in wholesale fuel costs.

Downing Street dismissed the claims as "utterly misleading" and a Number 10 source said: "This story is utterly misleading. The Government has not asked for a price freeze. People should wait for us to announce our plans."

At a regular Westminster briefing, the Prime Minister's official spokesman said: "The Government has not asked for a price freeze."

Asked why energy companies might have had the impression they were being asked to keep bills down, he replied: "The Prime Minister, the Government, other ministers have been clear that we want to see cost pressures going down and not up when it comes to energy bills, we've been very clear about that.

"Given that we are looking at rolling back the cost of some of the levies the only surprise would be if we weren't in discussions with the energy companies."

Miliband accused Mr Cameron of being a "weak and flailing Prime Minister".

He said: "What we now know is that while David Cameron has in public been opposing an energy price freeze, in private he has been pleading with the energy companies to get him off the hook. This is a weak and flailing Prime Minister.

"What Britain needs is Labour's strong, credible plan that we're publishing today to freeze energy prices until 2017 and reform a broken energy market so it properly works for business and families."

The shake-up – described by Miliband as the biggest since privatisation in the 1980s – would be implemented during the 20 month price freeze planned if Labour wins the general election.

An independent Energy Security Board would be created modelled on the Office for Budget Responsibility, to help draw up and implement a timetable for building energy capacity.

A new regulator will have powers to order firms to pass on wholesale savings to customers, and intervene in the market to ensure consumers will get good value in the future.

Other commitments in the green paper include preventing power generation companies doing exclusive deals with their retail arms as well as ensuring all environmental and policy levies on bills are delivering "value for money".

But Professor Roger Kemp, of Lancaster University and member of the Royal Academy of Engineering (RAEng) energy working group, said there was no silver bullet.

”Despite politicians’ hopes, there is not an engineering solution that will allow a reduction in energy prices, a reduction in greenhouse gases and will guarantee security of supply. If we want to decarbonise the UK and we want security of supply, then prices will rise,” he said.

“New investment is needed but the present uncertainty caused by the hiatus in energy market reform, political debate about cutting green taxes, and presumably subsidies, and about restructuring the industry make that increasingly risky to potential investors.”

Dame Sue Ion, Visiting Professor at Imperial College London and also a member of RAEng energy working group, agreed saying: “Current politicking is not good for long term secure supplies of electricity.

“The scale of the engineering challenge and its cost needs to be acknowledged and proper plans made to facilitate the necessary investment and the behavioural awareness which will make energy the precious resource it should be rather than a political commodity.”

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