TUC on road to capitalism with plans for power utility

The TUC yesterday paved the way for the establishment of a union- owned utility offering cut-price power to millions of trade unionists.

The ruling General Council of the TUC agreed to investigate the practicalities of the historic venture, which would mark a sea-change in the movement's attitude to capitalism in general and privatisation in particular.

Under the proposals, floated by Tony Cooper, General Secretary of the TUC-affiliated Engineers and Managers' Association, unions would set up a company with the help of private business, to take advantage of the liberalisation of electricity and gas supplies in early 1998. Currently the sale of power is dominated by a few large companies, but the Government intends to throw the market open to greater competition. It is not clear whether the TUC might set up an agency which would simply "sell" the names and addresses of seven million union members to newly-founded gas and electricity companies, or would take an equity stake in a power supply organisation.

The TUC General Council yesterday decided to set up a working party on the issue without a vote. Fuller discussion of the implications will now take place in the New Year.

On the advice of merchant bankers Kleinwort Benson, union leaders estimate that if they sold energy to only half their members it would earn the TUC pounds 30 million a year. Annual running costs of the enterprise have been estimated at pounds 400,000.

The TUC's financial problems could be solved overnight by the initiative, and John Monks, its General Secretary, is said to have an open mind on the issue.

However, such a venture would undermine the anti-privatisation policies of many of the largest TUC affiliates. Left-wingers are arguing that any enterprise which undercut private companies could affect the livelihood of trade unionists employed by them.

A spokesman for the GMB general union was sceptical about the idea. "It may simply be a kite which will never fly," he said.

It is understood that both the GMB and Unison, the public service union, are suspicious of the initiative. They were unsure whether the union movement should move into the business world and were also doubtful about the viability of this particular scheme.

The TUC working party will have to bear in mind whether the initiative might have implications for the "windfall tax" on former state-owned industries which is planned by the Labour Party. Internal TUC documents also speak of concern that unions might be accused of "selling out" to capitalism.

In a letter to the TUC leader, however, Mr Cooper says the plan could enable unions to "make a substantial amount of cash". He said that the main power generators were "keen to proceed".