Gas and electricity price freeze would ‘damage UK’
Former head of BP says energy companies need to make profits to be able to reinvest in energy infrastructure
Chairman of Cuadrilla and former head of BP Lord Browne has spoken out against Labour leader Ed Miliband’s promise to freeze gas and electricity rates for 20 months should he win the election.
He also explained why fracking was unlikely to bring down energy prices in the UK.
‘If you freeze things for long enough you’ll damage people and that won’t be good’
In an interview in BBC Radio Four, Lord Browne said: “The important thing for any country though is to make sure that energy which is like water, like air that we have access to what we need and that means people need to invest, and they need to invest in a steady continuous way.
“That means that energy companies, who always complain, nonetheless need money to invest – they need to make profits to invest. Conceptually, as a matter of principle, if you freeze things for long enough you’ll damage people and that won’t be good.”
Lord Browne stated that although an overall price freeze would hurt the country, helping those most in need and struggling to pay increasingly high energy bills was where the government should focus.
Fracking in the UK
Asked about the potential for fracking to bring down energy prices in the UK, Lord Browne, who is chairman of Cuadrilla one of the companies planning to frack in the UK, echoed Ed Davey and said it was unlikely to happen.
The reason for this is that the UK is part of an integrated European gas market and a single country fracking will not significantly lower prices all round. In the USA, where hydraulic fracturing has led to price decreases, he said this was due to the country operating in a single market and the sheer size of the reserves found.