Ed Miliband: Gamma minus
Interviewed in The Times today (pay wall), the Professor of Energy Policy is scathing about the price freeze policy announced by the Labour leader, whom he advised when Miliband was Energy and Climate Change Secretary:
How are we going to persuade companies to put billions of pounds into power generation if they can’t make any money out of it? This is particularly irresponsible coming from a former energy secretary in the last Labour government and he should know better.
I would love to believe that a politician could wave a wand and cap prices, but there is a market out there and to impose a cap when you’re trying to secure supplies is the worst possible thing to do.
When Prof Helm was Miliband’s adviser, he mostly succeeded in reining back the minister’s command-and-control instincts. How frustrating it must be for him to see that his reluctant student has learned so little.
The professor is not the only one who is fed up. Peter Mandelson doesn’t like it. And you only had to see Ed Balls’s face during Miliband’s speech (pictured) to know that he didn’t think much of it. At least the Shadow Chancellor understands markets. Jim Pickard in the FT on Saturday had a significant snippet:
In one private meeting he [Balls] warned that breaking up energy companies – a Miliband-inspired idea – could threaten investment.
As well as capping prices, Miliband wants to split the generators of electricity and extractors of gas from the retailers, breaking up vertical integration. Balls obviously understands that it is only by such integration that companies can hedge against change to be certain enough to invest.
With the price cap as well as the break-up policy, Miliband at a stroke yesterday made long-term investment in British energy, green or grey, more uncertain and expensive.Tagged in: ed miliband, energy policy, Labour party conference
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