Following Labour Party leader Ed Miliband’s decision to make spiralling energy costs an election issue, Julian Morgan – managing director of online price-comparison service Energy Advice Line – says that freezing energy prices would have “disastrous” repercussions for society. At a time when the British economy is steadily getting back to its feet, Morgan warns, capping prices would lose our energy companies – who employ around 600,000 staff – billions of pounds, which could badly disrupt the nation’s finances.

“Energy companies form part of the bedrock of the UK economy,” said Morgan, “and are inextricably linked to its trade and investment performance – particularly pensions. A financially fragile energy sector could be disastrous for the UK’s economic growth. The UK also needs a thriving utility sector to make the essential investments needed to renew its crumbling energy infrastructure.”

In a BBC interview this morning, Miliband maintained he is “absolutely clear” that energy bills would be frozen if his party wins the next general election. “We are absolutely confident because we’ve done all the figures – we’ve looked at all of the issues,” he said.

But while Morgan welcomes the opposition leader’s focus on the high price of electricity and gas for households across the country, he argues that Miliband should be focusing on boosting competition in the sector to lower costs in the long term. “Lack of competition in the UK’s energy market is also a significant factor,” he said. “The UK’s complex regulatory system, onerous financial requirements and the domination of the Big Six energy companies (that both produce and supply energy) deter new players from entering the market. And when a market isn’t amenable to competition, the select few that trade in it can get away with giving customers a raw deal in the form of bad service and high prices.”

Citing a lack of substance in Miliband’s plans, Morgan worries that the politician’s pledge is simply a means of winning support from voters who are struggling to afford to heat their homes. “If he is genuinely interested in delivering lower energy prices to consumers,” he said, “he should consult with stakeholders to reform the UK’s energy market and install a regulator that does its job properly. A truly competitive and properly regulated energy market will help to keep energy prices under control. Capping prices is nothing more than a populist gesture that could in fact risk making prices higher. The headlines won’t be so pleasing then, Mr Miliband.”