26 Sep 2013

Ed Miliband taking Labour backwards, warns Mandelson

Ed Miliband’s energy plans risks taking the Labour party backwards, says former business secretary Lord Mandelson.

Lord Mandelson and Ed Miliband (R)

Mr Mandelson, who in 1997 helped mastermind New Labour’s triumphant election campaign, said Mr Miliband’s pledge to freeze energy bills could undo the industrial policy he had worked hard to shape under Tony Blair.

Read more: Blackout? Ed Miliband defends energy reform plan

He said: “At the business department I tried to move on from the conventional choice in industrial policy between state control and laissez-faire.

“The industrial activism I developed showed that intervention in the economy – government doing some of the pump priming of important markets, sectors and technologies – was a sensible approach.”

But following Mr Miliband’s speech at the party’s annual conference, he added: “I believe that perceptions of Labour policy are in danger of being taken backwards.”

Shadow Energy Secretary Caroline Flint hit back, saying he was “plainly wrong”, noting that “Lord Mandelson may not have to worry about paying bills, but a lot of consumers and businesses do.”

Read more: FactCheck - pouring cold water on Labour's fuel price freeze

Energy companies were unsurprisingly united in their criticism of the Labour leader’s announcement in Brighton, which went down well with the party’s grassroots.

But another fellow New Labour architect Alastair Campbell disagreed with Lord Mandelson.

The former director of communications said in a tweet: “Peter M wrong re energy policy being shift to left. It is putting consumer first v anti competitive force. More New Deal than old Labour.”

Backlash

Mr Miliband has already faced a backlash from energy firms but has remained resolute, dismissing as “scare stories” claims Britain could face blackouts if Labour enforces a freeze on gas and electricity prices.

He has compared the energy companies to banks resisting regulation ahead of the 2008 crash and has written to the “big six” companies warning that they would face a consumer backlash if they fought his plans for a 20-month freeze following the next general election in May 2015.

His surprise announcement at the Labour conference in Brighton on Tuesday was greeted with horror by energy suppliers, with predictions that firms deprived of the power to set their own prices would be in danger of “economic ruin”.