Ed Miliband has said there can be no justification for further gas and electricity price hikes until the "broken" energy market has been reformed.

The Labour leader said the announcement by regulator Ofgem that it was referring the sector for a full-scale competition inquiry was confirmation that he was right to argue the market was "rigged".

Speaking to the Federation of Small Businesses (FSB), he said a Labour government would legislate to give small firms the same protection as householders in the energy market.

Loading article content

"The Big Six energy companies have made huge profits at the expense not just of hard-working families but hard-working business people too. They have done it because the market just isn't working," he said.

He said that Labour would establish a new energy regulator with powers to stop suppliers from rolling firms on to more expensive tariffs without their consent or hitting them with "crippling" back-bills going back years.

Chancellor George Osborne was also at the FSB.

He said the Government would consult on whether legislation was required to force lenders to release information on SMEs they reject for finance, so that they can be identified and approached by alternate providers.

"We are fully focused on making sure businesses can get the finance they need to grow and create jobs. This includes actively supporting innovative new forms of business lending."