Biggest union wants no part in TUC energy venture

Unprecedented plans by union leaders to establish a profit-making business to supply cheap energy to 7 million trade unionists were undermined yesterday when the biggest TUC affiliate refused to take part.

The 1.3 million-strong public service union Unison, which has 15,000 members in the electricity and gas supply industry, said the proposal was at best misplaced and at worst a "cynical attempt by the TUC to secure benefits for some union members while gambling with others' jobs".

A strongly worded emergency motion passed at the union's annual conference in Brighton yesterday called for a campaign against Union Energy, which intends to buy supplies from producers and sell them on to union members.

Unison yesterday decided that it would refuse to make the names and addresses of its members available to the company, whose acting chief executive is Peter Ibbotson, a former director at J Sainsbury. Potentially the company is the biggest bulk purchasing group to become involved in energy purchase for households.

A spokeswoman for the TUC said the venture, which is seeking investors from the private sector, enjoyed widespread support and she had little doubt the project would go ahead.

The row will almost certainly surface at the TUC Congress in September where it will be portrayed as a struggle between old and new unionism, old and new Labour.

Yesterday's Unison motion argued that the TUC had failed to recognise the "realities" faced by Unison members. Under deregulation employees faced an uncertain future with pressures on wages and conditions of employment, it said. Companies would try to reduce costs to compete for customers and increase dividends to shareholders. Union Energy's insistence on low prices could put Unison members out of work.

The resolution by the Unison conference refers to a TUC announcement which says that households subscribing to Union Energy would only need to be visited by one meter reader.

"Conference notes that the TUC has yet to develop an arbitration system to decide which meter reader will lose their job," the motion comments.

Mike Jeram, head of energy at Unison, said that only about 6 per cent of any customer's bill was made up of supply costs. The vast majority of costs were incurred in distribution, transmission and generation. "If they really are concerned about reducing prices, the TUC should be arguing for greater competition among generators and tighter regulation in distribution and transmission - although we are not saying they should."

It is intended that a quarter of the shares in the new company will be owned by the TUC and the rest by private investors, probably City institutions.

Profits received by the TUC would be used to promote energy conservation measures, according to Mike Jones, head of finance and administration at the TUC and acting chairman of the company.

He said that the venture would be performing "exceedingly well" if it had signed up 400,000 households in three years' time. In the longer term there could be many more, he said.

Mr Jones said the profits would be used to subsidise the installation of energy conservation measures in subscribers' homes.

Other money could be used to set up a hardship fund for trade unionists. Unison's decision to disassociate itself from the venture was regrettable, and he called for talks in an attempt to address the union's concerns.