Skip to main content

Star Comment: A false fix to energy scam

GOVERNMENT promises of serious cuts in household energy bills as the result of reducing the energy company obligation (ECO) on the power industry have proven to be an illusion.

Energy and Climate Change Secretary Ed Davey spoke in early December of a “workable package which would save households around £50 on average.”

Deputy Prime Minister Nick Clegg left no doubt that the shabby deal with the power companies was dictated by the political need to undermine the head of electoral steam building up behind Labour’s promised price freeze.

Clegg contrasted the coalition plan with Ed Miliband’s temporary price freeze “con,” calling it “good for the environment, good for employment and it’s also good for keeping people’s bills down.”

He could have added that it also provided good publicity for the energy companies claiming to be doing their bit to hold down the cost of living.

In the cold light of day, four of the big six utilities chose simply to keep the bulk of the tax cut for themselves, boosting profits by £140 million.

Having seen the constant failure of the energy cartel to put customers’ interests before those of shareholders, most people will not be surprised.

The main question for politicians should be how to respond to this unremitting greed and arrogance.

Shadow energy secretary Caroline Flint trots out the party line about David Cameron always standing up for the privileged few in the current cost-of-living crisis. Of course he does — what does anyone expect of a pig but a grunt? So far so bleeding obvious.

Yet Labour’s alternative to the coalition policy of allowing the energy oligarchy to continue taking us all to the cleaners is breathtakingly inadequate.

Flint reaffirms her party’s pledge of a temporary price freeze but puts her faith in a “reset” energy market to prevent future overcharging.

Six companies already dominate the market and operate an informal cartel. They have the power to squeeze out incoming “competitors” or to absorb them into their money-making scheme.

The obvious fact that Labour’s leaders steadfastly ignore is that gas and electricity are natural monopolies. Each home has only one gas pipe and electricity cable connecting it to the mains.

“Competition” is confined to book-keeping operations designed to give the impression of individual companies offering different packages when in reality they are cobbled-together schemes to cream off a levy on households to generate private profits.

None of the companies invests in new sources of energy, especially renewables, without government guarantees, which undermines traditional myths of capitalist initiative and risk.

The profit motive undermines the case made by all politicians that energy companies should leave a smaller carbon footprint because of growing awareness of the causes of global warming.

There is a fundamental contradiction between the interest of shareholders — maximum profits — and environmental considerations.

The National Pensioners Convention (NPC), the Campaign for Public Ownership, the Communist Party and other campaigning groups are more in tune with public opinion, which demands that this privatisation nightmare be brought to an end.

As NPC spokesman Neil Duncan-Jordan notes uncontroversially, “the private energy market is ripping off customers every day of the week.”

Tinkering with the privatisation model to sustain the false image of market competition is a deceit uttered against the people. Our energy industry must be returned to public ownership to serve the majority not the privileged minority.

OWNED BY OUR READERS

We're a reader-owned co-operative, which means you can become part of the paper too by buying shares in the People’s Press Printing Society.

 

 

Become a supporter

Fighting fund

You've Raised:£ 12,411
We need:£ 5,589
5 Days remaining
Donate today