Coalition denies begging ‘big six’ over energy prices

The government has denied it is resorting to begging the 'big six' energy companies to stop raising prices until 2015, prompting an avalanche of scorn from the left.

Thirty-six days after Ed Miliband said Labour would legislate for an 18-month halt on price hikes if he wins the 2015 general election, the Conservatives and Liberal Democrats in government were reportedly attempting to exhort energy firms into holding prices for the next 18 months.

But the BBC, which originally reported the story, was forced to cite Treasury sources denying the plan was as it had originally claimed.

Industry body Energy UK's Angela Knight had in any case suggested it may be difficult for energy companies to keep prices stable because of rising wholesale costs.

She told the Today programme only around 18% of energy consumers' bills was controlled by energy companies. Transmission costs, wholesale prices and the green and social levies imposed by the coalition make up the remainder.

Ministers are currently reviewing green subsidies, or "green crap" as the Sun newspaper has claimed David Cameron privately calls them.

But their politically sensitive nature appears to have been behind the attempt to win over energy companies, by seeking a deal with firms which together would result in annual bills being cut by £50.

"David Cameron is making himself look weaker and weaker with every passing day," shadow energy secretary Caroline Flint said.

"For months he has been saying Labour's energy price freeze is a con.

"Now he is begging the energy companies to do the very same thing.

"But the truth is that only by legislating for a freeze can we guarantee that it will happen.

"David Cameron won't do that because he's not prepared to stand up to the big energy companies."

The Department for Energy and Climate Change is not confirming the request, which is expected to be confirmed in next week's autumn statement.

Its emergence today could be viewed as an attempt at trumping the announcement of more details of Labour's energy policy in Manchester.

Miliband will tell an audience at the city's Town Hall: "We will stop you being ripped off and, together, we will power Britain into the next century."

The energy green paper outlines the opposition's plans to prevent energy companies doing exclusive deals in which their power generation companies sell energy to their retail arms.

They will simplify tariffs, allow new entrants into the market and create a new regulator replacing Ofgem.