Courtesy Guardian

Ignacio Galán says his company may pull out of £15bn investment programme if profits are risked by Ed Miliband's plan

The row over domestic energy prices has intensified as the head of one of the big six companies accused Ed Miliband of risking investment in Britain and laying the ground for blackouts by proposing a fuel price freeze.

As Downing Street indicated that Tory ministers were looking to cut financial support for energy efficiency in poorer households as part of a drive to bring down the overall cost of fuel bills, the owner of Scottish Power warned that the Labour leader was attempting to defy international markets.

Ignacio Galán, the chairman of Spanish energy company Iberdrola, which owns Scottish Power, said: "I'd be delighted if Mr Miliband can already fix a cap for the international gas prices, for the international oil prices, for the international coal prices. But he does not have enough knowledge and power to fix this cap as well for those raw materials, which are already creating this energy."

The Spanish executive, who said Britain was in desperate need of investment, accused Miliband of putting at risk Scottish Power's plans for investment worth £15bn. "This winter or the next two winters some problems can happen, some blackouts can happen in the country," he said. "To create some uncertainty around these [investment plans] is very negative."

The warning came as Downing Street all but confirmed that Tory ministers were looking to target the Energy Company Obligation (ECO), which helps poorer households improve energy efficiency. George Osborne is understood to be keen to reduce the obligation, which costs billpayers £1.3bn a year and accounts for 4%, or £47, of an average annual bill, according to government figures.

Asked whether ECO was under review by No 10 or the Treasury, with a view to unwinding the measure, the prime minister's spokesman said: "People's budgets are squeezed, people are feeling the pressure. They would expect us to look across the range of what can be done. We have already made an announcement [to address the rising costs of living] in the context of rail fares. We are going to continue that process of work."

Asked whether the ECO would be wound up, the spokesman said: "I would expect them to look across the full board, across the living standards space."

On the subject of green subsidies, the spokesman said: "We are going to look across the board where we may be able to continue to do more to help families with the budget pressures that they face."

The remarks are likely to infuriate the Liberal Democrat energy secretary, Ed Davey, who wrote on Tuesday to energy companies, most of whom oppose the ECO scheme, demanding greater transparency over how much the policy actually costs them to implement.

On Thursday Miliband accused energy company SSE of "ripping off" consumers after it unveiled an 8.2% price rise. Caroline Flint, the shadow energy and climate change secretary, said: "What any investor needs isn't short term returns based on overcharging but long term certainty on returns. By rebuilding trust in the market and providing greater investor certainty our market reforms will support investment. That is why we have committed to the 2030 power sector decarbonisation target which the industry has been calling for and we will stick with the system of contracts for difference which guarantees investors a return on their investment."