Tag Archives: Energy

Energy debate highlights cross-party ineptitude

Last year when SSE put their prices up and all the other energy firms followed suit, I wrote that the only way to make energy bills affordable was to nationalise the industry.

Today (10/10/13) SSE have upped their prices again and in the next few weeks all the other energy companies will follow suit. The arguments I’ve made before haven’t changed because the facts haven’t changed, so I’m not going to dwell on that for too long. Here’s a quick run down of what’s been said:

SSE claim that increases in the cost of energy on the wholesale market, transportation, government levies etc have forced them to increase their prices. This is true. The Tories are claiming that they, alongside industry regulator OFGEM, have made changes to make bills clearer and make price comparison easier. This is also true. Labour state that the cost of energy has increased by £300 since 2010 and looks to increase further. Again, true.

 

So, now time for some falsehoods. The Tories point to increased competition as the best way to keep energy costs down. Not likely, as increases in competition have gone side-by-side with price increases over the last decade or so. I’m not saying their linked, just that it hasn’t stopped increases happening. Speaking to members of UNISON Energy at the trade union’s conference this year, Caroline Flint, shadow minister for Energy, stated that it was a lack of regulatory power which allowed prices to increase. Again, not the case; the energy industry is heavily regulated and if there is much more regulation in place the market as a whole would fail to function properly.

The problem is that this essential service is run with the primary goal of making money. When companies have to make profits they will not absorb increased costs in wholesale energy, or drop their prices when their outgoings fall. That’s not good business.

By nationalising the energy industry and taking the power away from big business, a government could employ elected technocrats to run the service as efficiently and effectively as possible. Similarly this approach would centralise resources and add a greater level of transparency, ensuring that consumers’ money was going towards their actual energy usge instead of yachts and flash cars and shit.

I’ve already banged this drum enough, you know what I think and why. I want to strike a different note here.

When doing some research for this article I came across a video of yesterdays (9/10/13) PMQs in which Cameron and Miliband went toe-to-toe over the rising cost of energy. What I saw disgusted and disheartened me. Watching two grown men squabbling like 5 year olds in the playground reinforced the reason I became so disenfranchised with politics. These two wankers are more interested in point scoring than discussing a serious issue which affects every person in this country and kills thousands every year.

When the 5 minute video ended all I could thiink was “we’re all fucked.” Neither of these “leaders” has a clue what to do about the energy issue, just as they don’t know what to do about rises in the cost of living or falling standards in the NHS. The fact that one of them will be running this country through the end of this decade fills me with dread for my friends and family.

Incidentally, I don’t think that neither Cameron nor Milliband has a clue because they’re not arguing for what I want, I expect that. My concern is born out of the uninformed, unimaginative policies that two of the most powerful people in this country have for something that is basic to a decent standard of living.

Oh, yeah, I forgot to tear down the energy price freeze thing. So, Miliband wants to force energy companies to freeze their prices for 20 months if he’s elected in 2015. What a bunch of bullshit. He wouldn’t have the power to do that, and if he did it would end very badly. I’m a big fan of forcing energy companies to do shit they don’t want to, but this is a terrible idea. Quite simply, energy prices would skyrocket as Miiliband comes to power, energy companies would withdraw from the UK market, thousands of jobs would be lost, hundreds of thousands would get into debt, investment in infrastructure would cease completely and in 2018-2020 we’d have a supply shortage which would force the cost of fuel up more as energy companies were forced to buy increasing amounts from the international market. You suck, Ed.

Also, just because I can’t resist, it made me laugh when Cameron said that Miliband wished for a “Marxist universe” in which “government could control international energy markets”. In a Marxist universe there ARE NO MARKETS. Dick. I understand the irony of attacking politicians for being childish and misinformed with alot of sweary cheapshots, but I’m not an elected official so I’m allowed to.

To recap, then. We’re all doomed. Mainstream parties have no answer for the rising cost of energy and seem uninterested in taking meaningful and productive steps towards resolving the issue. Energy companies will continue to increase their prices because their costs are going to increase. You can’t expect them to do anything else, they’re private businesses, not social enterprises.

Behind all the grandstanding and headlines, the slimmer household budgets and rising death toll, we have massive multi-billion pound companies who are doing what they’re made to do: exploit a broken system. This is the same in any industry that you look at and nothing is going to change until we take back control of the things that we rely on.

I’m off to put the heating on now, while I can still afford it.

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The real solution to rising gas and electricity bills

Want lower energy bills? Nationalise utilities!

EDF Energy announced that its prices will be increasing by 10.8% per fuel today, making them the 5th of the “Big Six” energy companies to increase their prices this year. With reports that fuel poverty (where a household spends more than 10% of its annual income on fuel bills) is going to continue to increase, as it has done year-on-year since 2003, this news is hardly a surprise. A study from Poverty UK has shown that currently 6.3 million households are in fuel poverty, including over 40% of the poorest fifth of people in the country, and that pensioners and single parents are disproportionately affected. The effect that fuel poverty has, particularly on pensioners and low-income families, is terrifying; during winter 2010-11 over 2,500 deaths were directly linked to fuel poverty and many people are now in a position where they have to decide whether to eat or heat their homes.

The nature of this issue turns from terrifying to despicable, however, when you look at how energy companies are performing financially. Every one of the “Big Six” (British Gas, Npower, E.On, EDF, SSE and Scottish Power) reported eye-watering profits in 2011, with their parent companies making anywhere between £1.3 billion and £2.3 billion profit over the last 12 months. What’s more, many of these companies, such as British Gas and E.On, are currently laying off staff or enforcing pay freezes as cost-cutting measures. In this years Budget Tory Chancellor (and contender for the title of World’s Most Punchable Face) George Osborne has attacked green taxes and announced that he will be backing energy companies looking to build gas-fired power plants by cutting Emissions Performance Standards, meaning that the energy giants will be able to produce gas and electricity more cheaply whilst hiking prices and cutting jobs. As a reward for driving pensioners to an early grave and throwing hundreds of people on the dole queue, the chairmen (and they are all men) of the Big Six each earned at least £1million last year. We truly are all in this together….

So, you ask, what can we do to curb the effects of this years price rise and the certain death it means for thousands of people across the country? Well, OFGEM has recently published plans for a “simpler, clearer and fairer energy market for consumers.” Here’s what they had in mind:

SIMPLER CHOICES

Ban on complex multi-tier tariffs and scrapping of uncompetitive dead tariffs*

All tariffs shown as a standing charge and single unit price

Limit on number of core tariffs each supplier is allowed to offer

 

CLEARER INFORMATION

All consumers given their supplier’s cheapest tariff on their bill

A Tariff Comparison Rate to compare tariffs ‘like for like’ across the market

New personalised information to help consumers find their best deal

FAIRER TREATMENT

Fair treatment to be enforced by standards of conduct backed by fines

Consumers to default to cheapest tariffs at the end of fixed term contracts

Ofgem to consider ways to promote more collective switching

That all sounds very good, but it doesn’t stop the cause of the problem; rising gas and electricity prices on the wholesale market. In an article on the website moneysavingexpert.com Phil Bentley, the Big Boss of British Gas, gave us a very simple-to-understand breakdown of where the money from our utility bills go:

As you can see, energy companies only make about 5% profit on our energy bills. Don’t get me wrong, 5% of a fuckton is still a helluva lot, but, and it pains me to say this, Bentley’s right. Energy companies, on the whole, aren’t behaving outrageously or gambling with our money, they aren’t ripping us off, they’re just making a reasonable profit on what they sell. The redundancies they’re making and the tax cuts they receive are simply part of an economic exercise to help energy companies do what they’re designed to do, make more money. So then, what difference will making tariffs simpler or encouraging collective bargaining have on the publics gas and electricity bills?

In short, little to fuck all; it’s not lack of competition that’s behind Britain’s increasing fuel poverty, but the profit-centred nature of the energy market. Whilst private companies who have to turn a buck are responsible for keeping our homes warm and our lights on we will continue to see prices soar, with the most vulnerable sections of society hit hardest. If we want to see a drop in energy bills, if we want the elderly and the poor to be able to heat their homes AND eat three times a day (what luxury!), we need to nationalize all UK energy companies.

To be clear, I’m not talking about the same kind of “nationalisation” we saw in the banking sector; these companies should be run by the public, without compensation to the super-rich who make millions out of a basic human need. With their money, infrastructure and assets we could ensure that every single person could live comfortably in their own homes, cut carbon emissions, create jobs and drive forward the renewable energy industry.

Rant over, thanks for reading.

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