The head of energy giant Scottish Power has warned that a pledge by Labour to freeze tariffs could jeopardise billions of pounds-worth of investment and thousands of jobs.
Keith Anderson, the Spanish-owned firm’s chief corporate officer, said the policy would sow “doubts and fears” about whether to plough money into the sector as it faces costly modernisation and renewable energy programmes.
In a letter to Ed Miliband, who set out plans last week to freeze gas and electricity prices for 20 months if Labour were to win the 2015 general election, Mr Anderson spelt out how this might affect the company’s plans for investment of up to £15 billion in the UK.
This would include a proposal outlined to regulator Ofgem to spend £5.2 billion on the firm’s distribution network, a scheme which will play a major role in connecting renewable energy as well as improving reliability and service and reducing costs for customers.
The money would be in addition to the £2.6 billion investment in the network between now and 2021. Together the projects would create 4,500 new jobs, Mr Anderson said.
There are also plans to invest up to £5 billion in renewable energy in the UK, where Scottish Power has 5.6 million customer accounts.
Mr Anderson acknowledged that there were “understandable and widespread concerns about consumer prices”.
But he added: “Any move to freeze all domestic bills will not alter the fact that the investment Britain needs still has to be paid for.
“To the extent such a freeze would cause investors to doubt they will receive an adequate return or to fear future similar interventions, those doubts and fears would be reflected in the appetite to invest.”
Mr Anderson hinted that investment by the company, which is owned by Spain’s Iberdrola, could go elsewhere if the corporate climate in Britain were to change.
“As an international energy company, we carefully analyse all of the major markets in the world. Maintaining principles of sound regulation and avoiding regulatory uncertainty are critical to securing this global investment in the UK.”
Mr Anderson’s explicit warning about the consequences of Labour’s pledge is the latest alarm sounded by the energy industry, which has warned the freeze would hit the building of new power stations and affect the 600,000 people it employs.