Nearly £1 billion was wiped off the value of energy giant Centrica today, 24 hours after Ed Miliband pledged a Labour government would freeze gas and electricity prices.
Shares in British Gas’s holding company tumbled almost five per cent, dropping 18.6p to 378.1p and wiping £950 million off its value.
SSE, formerly Scottish and Southern Energy, also suffered as its shares fell 83p, or 5.3 per cent, to 1497p.
Experts stressed that not all the fall in the share value of the energy giants was down to investors taking fright due to Mr Miliband’s new policy.
But the plunge in the value of Centrica and other energy firms reinforced fears over the impact of the Labour leader’s intervention.
Amid the controversy, Mr Miliband appeared to soften his energy price freeze pledge today by conceding he may have to be flexible if there is an energy crisis.
Challenged what he would do if world energy prices lurched upwards, he said: “Of course if there was a major shock companies could make their case, but I’m pretty clear this freeze is going to happen.”
Conservatives immediately asked him to explain if he would let the big energy firms raise their prices in such a crisis or whether he would subsidise them with taxpayers’ money. Energy firms say that if the freeze, due to last until 2017, was kept rigid, they would run out of investment money.
A defiant Mr Miliband today turned up his attack on energy bosses who claimed his plan to freeze prices would cause power cuts. He said: “They’re pretty unreliable witnesses because these are people who are overcharging people. Of course, they’re going to say when someone calls time on it that they’re not very happy.”
He also tried to divide the Big Six energy firms by warning that they would be deemed “part of the problem” if they opposed his plans.
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The Labour leader fought back after he awoke to headlines accusing him of putting at risk investment in green energy and new-generation power stations if he were to freeze prices. There was also criticism over his announcement of powers to seize housing sites left unused by developers and other announcements in his speech.
One former Labour government minister said the leader’s “socialist” policies would push unemployment levels beyond the three million mark.
Lord Jones, trade minister under Gordon Brown, said: “The sheer damage it will do to the economy does not bear thinking about. They are talking that this will be the end of the energy market — it’s far more dangerous. This is sheer, unbridled socialism. He is going to hijack the organs of management.
“It’s taking the country back to the dreadful days of development land tax in Wilson and Callaghan’s times.”
The crossbench peer, a former head of the Confederation of British Industry, added: “I go round the world, banging the drum for Britain, trying to get companies to invest in Britain. Yesterday made that a little more difficult.”
