The decision by Labour to freeze energy prices would potentially jeopardise investment in the UK market, energy minister Michael Fallon has told the Conservative Party conference.
His comments come as the government continues to try to counter Labour leader Ed Miliband’s promise that he would implement a 20 month cap on energy prices in 2015.
Freezes would ‘deter major investors’
Fallon told attendees that while freezing the price of energy bills until 2017 would be a bonus for UK consumers in theory, it could potentially be catastrophic for the energy sector as a whole as it could deter companies from investing.
He said that by stopping any price rises, Labour would essentially be failing to attract investors by showing the country as one where there would be a danger of them losing money.
“[Energy companies] have global investment mandates –they can invest in Kazakhstan, Brazil, the United Kingdom. The great danger from what Miliband has done is [that Labour] has made the United Kingdom a riskier investment location for these companies.”
Conservatives committed to lowering bills
While Fallon was quick to dismiss the idea of freezing energy bills, he did go on to say that the Conservatives remain committed to lowering bills for consumers.
He questioned the dominance held over the market by the big six energy companies, and said that the government is currently looking at ways to make the energy sector more competitive, such as reducing the taxes levied against companies, to allow them to pass savings on to their customers.
“We constantly keep an eye on the pressures on hard-working families. We are looking again at some of these energy taxes right now to see whether there’s a case for ensuring energy bills don’t increase out of line,” he added, saying that there needs to be a degree of “downward pressure” on prices.