Are price freezes enough?


Only public ownership can fix our broken energy system,  argues Jenny Lennox

I AM SURE MANY Labour members, on both left and right of the Party, breathed a sigh of relief after Ed Miliband’s speech at Conference. He finally said what a Labour Government would do if elected in 2015, and there was clear policy on an issue that actually resonates with UK residents – freezing energy bills.

BurningWithout wanting to pour cold water on this proposal – and it would be cold because it costs far too much to heat it up – you have to ask yourself whether freezing costs really gets to the heart of the issue.

Officially, Labour policy is that while prices are frozen, they will consider how the energy industry should be reformed to ensure consumers aren’t being ripped off by the Big Six companies (EDF, E.on, British Gas, Scottish Power, SSE and npower) in the sector.

In 2012, the Big Six made a combined profit of £3.37 billion. This equates to a 73% increase in profits in three years, and around a £65 profit margin per household. The average annual energy bill in 2012 was £1,315 per household, and this is predicted to increase this year to around £1,400. This is set against a backdrop of stagnating wages, and falling living standards.

The current energy system is not just problematic, it is completely broken. It doesn’t work in the interests of people, it works in the interests of companies – which we have made more important than human beings. We don’t produce energy to make money, we produce it to keep warm during the winter, cool during the summer, feed ourselves and stay healthy. So why are we the last consideration in this process?

We are told that the costs of green energy creation have hiked up our bills, but does anyone really believe that the Big Six are interested in green energy? They don’t want to harness cheap renewables, through local energy creation, because where would they fit into that picture, and how would they profit from it?

Labour shadow ministers have talked about reforming the energy market, and splitting the wholesale and retail parts, to ensure that consumers really do get the best deal, and are not the victims of price-rigging. This tinkering really doesn’t address the problem.

But Miliband must be pursuing a policy that will fix things, people say, because ever since his speech the Big Six have told us the lights will go out, and the Tories have said that communism is just around the corner if Labour gets elected.

Perhaps what these companies are really scared about, is the natural conclusion of Miliband’s arguments. He has asked “What happens when competition fails?”, and said that “the system is broken, and we’re going to fix it”. He decried governments who had “not had the strength to stand up to the strong” and said a Labour Government would be one that “fights for you”.

windIf you follow these statements to their full logic, then surely public ownership of energy creation and provision is the only conclusion. This is the only way we can ensure that no single company or group of people will profit from the basic needs of others. It is the only way we can ensure people’s energy needs are met without crippling them with ridiculous costs. And it will guarantee proper accountable investment in locally generated green energy, minimising the calls on a leaky national grid. The left needs to harness these arguments, and make them as powerful and popular as those for the nationalisation of the railways.

I like the new Ed Miliband, who seems comfortable in his role as a guide through the capitalist world, bringing back the idea that those who profit from us must show responsibility towards us. But I feel that he has taken us only part of the way towards the ultimate answer.

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