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Policy & Regulation The price freeze in brief £4.5bn The amount customers will benefit from the price freeze, according to Labour Customers, who are immediately benefiting from frozen tariffs offered by three of the big six lower returns and lower investment, as Centrica has stressed with its gas business. Falling capital expenditure levels in a sector as crucial as energy are almost certain to lead to more direct public involvement in investment, perhaps through a revived Central Electricity Generating Board (CEGB). Indeed, irrespective of Miliband's pledge, this scenario may well lead to new nuclearbuild in the UK being undertaken by the government because negotiations with EDF seem to be going nowhere. Slowly, the UK energy sector is moving towards more state control, with a raft of expensive requirements being continuously placed upon the big six companies. This process will be accelerated if price controls – temporary or otherwise – are reintroduced and inadequate investment forces more direct public participation. Such a scenario is not re-nationalisation per se, but it could lead to that, if utility shares plunge on the back of far lower financial returns. Although Miliband has not proposed outright re-nationalisation of the energy sector, it is instructive – given the Labour Party's former embracing of public ownership – to consider the cost implications. The two UK-owned energy companies, Centrica and SSE, are currently worth £33 billion. Assuming their share prices reacted negatively to impending state acquisition, say, of a majority 51 per cent stake, the total cost could amount to c£12 billion. Most of the remaining value for the big six lies with their large generating plants. The value of their supply businesses would be modest if margins were sharply reduced. On this basis, the value of the UK assets of the big six should exceed £25 billion. This ballpark figure is based upon securing a 51 per cent shareholding in the UK assets of the two quoted UK companies and a similar stake in UK power stations owned by the four other big six companies. It assumes, too, that National Grid, with a current market value of its UK assets of over £20 billion, retains its existing status. Outright energy re-nationalisation may be fanciful thinking, and is certainly not current Labour Party policy. However, it was not part of the last Labour government's manifesto to spend £45.5 billion of taxpayers' money acquiring an 82 per cent stake in the collapsed Royal Bank of Scotland. If Labour triumphed in 2015, could something similar happen in the UK energy sector? Nigel Hawkins is a director of Nigel Hawkins Associates, which undertakes investment and policy research GOOD WEEK BAD WEEK £3.6bn The entire annual earnings before interest and tax of the big six "As a result of the speech, I believe that perceptions of Labour policy are in danger of being taken backwards" – Peter Mandelson Small, independent energy suppliers, who experts predict could be put out of business by a price freeze "When costs are outside your control, but someone is fixing your price and putting a ceiling on it, the risk is that it is potentially a recipe for economic ruin for a company." – Centrica chairman Sir Roger Carr It is putting consumer first vs anti-competitive force. More New Deal than old Labour 17 Number of times Ed Miliband said "we're Britain, we can do better than this," or a close variation, in his conference speech £110 Alistair Campbell The amount by which moving subsidies from the energy bill to general taxation would immediately cut customer's bills, according to SSE's Alistair Philips-Davies UTILITY WEEK | 4th - 10th October | 15