Rising energy costs: the bullies at the Big Six must be stood up to

It’s the story of modern capitalism: debt is nationalised and profits are privatised


Perhaps the energy company executives should just be arrested for incitement to riot. Npower are the latest to see how far they can provoke the British people, hiking energy bills by 10.4 per cent and adding £137 to the average bill. Not all of the Big Six energy firms have announced how much they will rip-off British consumers, but the message of the energy group is clear. They are prepared to brave the outrage as they increase our bills at three times the rate of inflation during the longest fall in living standards since the 1870s.

It is hardly hyperbole to point out that people will die as a consequence. Cold homes are a contributory factor to the 20,000 or more elderly people who make up the macabre “excess winter deaths” statistics each year. According to Age UK, you are three times more likely to suffer a preventable death in a cold home than a warm home. Pensioners forced to choose between heating their homes and feeding themselves will slowly, quietly freeze to death. In a just world, this alone would be grounds to argue the Big Six have forfeited any right to monopolise the provision of our energy supplies.

But the charge sheet is long indeed. The Fuel Poverty Advisory Group believes that 9 million people could be driven into fuel poverty by 2016. It is a plight already endured by more of our citizens than any other Western European country. Research earlier this year suggested that nearly a quarter of households were choosing between heating homes and feeding their children: this, in the seventh richest country on Earth.

Misery for millions is matched by boom time for the Big Six shareholders. Who knows how they celebrated their £3.7bn worth of profit in 2012, but they surely must have marked a 73 per cent jump over three years somehow. The pretence that this is being invested for the future has been all but abandoned. Well over half ended up as dividend payments to shareholders, and investment in large-scale clean energy has collapsed from £7.2bn to £3bn.

As they help to impoverish millions of Britons, the Big Six are waging a determined fightback from a position of huge power. If their threats of blackouts in response to Ed Miliband’s proposed temporary price freeze had emanated from the trade unions, Fleet Street would have roared with hysteria: but there was no talk of “Energy Barons Holding the Country to Ransom”

The voice of the grouping, Energy UK, is fronted by Angela Knight, a one-time Conservative Economic Secretary to the Treasury, and was recently described by Tory Energy minister Michael Fallon as “one of the strongest and most well-argued lobbies there is”. Centrica’s chairman Sir Roger Carr advises Cameron as a member of his Business Advisory Panel; the company’s chief executive, Sam Laidlaw, was a member for two years. Cameron’s personal adviser on energy and climate change, Tara Singh, was a public affairs manager at Centrica; and officials from EDF and Centrica are seconded to the Department of Energy and Climate Change. This is corporate entryism.

They have powerful friends indeed, who castigated Labour with the sort of rhetoric that belongs to Joseph McCarthy’s 1950s House Committee on Un-American Activities. But the truth is that Miliband’s proposals were more moderate than what much of the British public want. Polls show nearly seven out of 10 voters want energy in public hands. And that is the case that must now be made. It is irrational, immoral and unjust to leave Britain’s energy in the hands of companies responsive to shareholders – most of whom are not even based in the country – rather than those of consumers.

The truth is the Coalition have no objections to state ownership, as long as it is any state but Britain involved. EDF can profiteer at the expense of British consumers, and the French state can benefit. Or take the new deal with EDF and Chinese investors to build the Hinkley Point nuclear power station.

Liberal Democrat Energy and Climate Secretary Ed Davey once declared that nuclear power was, along with “safety and environmental risks” only “possible with vast taxpayer subsidies or a rigged market”; and last year wrote that “new nuclear will only be built if it is without public subsidy... this is non-negotiable”.

The Coalition Agreement pledged that there would be no new nuclear power stations with public subsidy. Yes, we long ago worked out that the Liberal Democrats are the political U-turn in party form, but still this is an astonishing reversal of positions. The Government has struck a deal worth twice  today’s market rate for nuclear-generated electricity over 35 years – a whopping big subsidy that will be paid by British taxpayers to France and China.

It is the story of modern capitalism: the nationalisation of debt and the privatisation of profit. In 2010 alone, the taxpayer was stuck with a £4bn bill to close down old nuclear plants, and the clean-up cost for Hinkley A this year was £736m. And take Royal Mail: the profitable elements flogged off to the likes of the Kuwaiti dictatorship’s sovereign wealth fund, while the British taxpayer carried the burden of the pension fund. It was the same story with the banks, too. Cameron et al can wail all they want about “socialism” in response to a temporary price freeze, but the reality is socialism for the rich thrives under their administration.

No more fiddling around the edges. A temporary freeze in prices will be a welcome respite to consumers battling sleepless nights over mounting bills. But it does not address the fundamental absurdity of leaving our energy supplies in the hands of profiteers. That does not mean a return to old-style statism, with Whitehall bureaucrats replacing shareholders.

Consumers should have elected representatives in a new publicly run British energy industry. All profits should be reinvested in lowering prices, in modernisation, and in building the renewable energies of the future. It should be combined with an emergency national insulation programme for homes and businesses, dramatically slashing fuel poverty, helping the environment, and creating secure jobs in the process.

Such proposals may be overwhelmingly popular, but they are sneered at as utopian daydreaming. Take a look at proposals from New Zealand’s Labour Party, who successfully renationalised the railways after their own disastrous experiment in privatisation. They are calling for a new agency, NZ Power, to act as a single buyer of power for New Zealand households: a stealth form of nationalisation. Or look at the experience of Clement Attlee’s post-war Labour government, saddled with far worse debts than modern Britain, which exchanged shares for Government bonds. It would mean a steady stream of profit to the Treasury, too.

The free market is anything but: it is a state-subsidised racket at the expense of working people. The Big Six have tested our patience more than enough. Bullies have to be stood up to. Instead of allowing them to hold us to ransom, forcing millions into poverty or cold or both, it’s time to demand we take back what is rightfully ours.

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