Labour party leader Ed Miliband pledgted to freeze energy prices for two years if it won the election in 2015 (Photo: Reuters)
Britain's biggest energy stocks tumbled in the 25 September midday trading session following Labour leader Ed Miliband's pledge to freeze energy prices until 2017 if it wins the 2015 election.
Centrica shares fell by nearly 5% at one point to 378.00p while SSE tumbled by 4.63% to 1506.88p.
At the Labour party conference in Brighton, Miliband pledged to freeze energy prices for two years. British consumers, he said, had been charged "too much, for too long".
"The system is broken and we're going to fix it," said Miliband.
"If we win that election in 2015, the next Labour government will freeze gas and electricity prices until the start of 2017. Your bills will not rise. It will benefit millions of families and millions of businesses."
Miliband also wrote to the largest six largest energy companies, who make up 99% of the UK energy sector, warning that they would be broken up and better supervised by a new regulator. He claimed that would help drive down prices.
A plan to impose a pricing cap on business and consumer energy bills for two years would cost energy firms £4.5bn (€5.3bn, $7.2bn), it has been estimated.
Companies and Markets Hit Back
Centrica said: "The impact of such a policy would be damaging for the country's long-term prosperity and for our customers."
Energy analysts reacted sceptically to Miliband's promise to freeze energy prices and said the plan "did not add up".
"It could take away the investment in any underlying UK energy system, which is already under strain," said Malcolm Graham-Wood of VSA Capital.
"The only way to keep prices down is to take your costs out - your power stations or investment or whatever you buy. You have to buy less product and therefore there will be more likelihood of power cuts which we are expecting in two or three years' time."
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